For 24 years, Timor-Leste fought for sovereignty. Now, its government says the fight is not over. The target has shifted from Indonesian occupiers to a former ally: Australia. At the center of the dispute sits a gas field 450 kilometers northwest of Darwin, holding 5.1 trillion cubic feet of gas and at least 226 million barrels of condensate. The Greater Sunrise field is worth an estimated $50 billion. And for Prime Minister Kay Rala Xanana Gusmão, how that money flows defines what independence actually means.
On 30 January 2025, Gusmão told parliament that Dili is reviewing every defense, trade, and infrastructure agreement signed with Canberra since 2018. Parallel talks with Beijing will open later this month. He called the shift “unfinished sovereignty business.” The phrase was a direct reference to stalled negotiations over where the gas from Greater Sunrise gets processed.
A 2018 treaty split upstream revenue 80-20 in Timor-Leste’s favor. That part was settled. The downstream route was not. Canberra wants a floating LNG platform tied to Australian supply chains. Dili demands an onshore plant at Beaçu, on Timor-Leste’s south coast, to create local jobs. Woodside Petroleum, the field’s operator, warns the Timor option adds $5 billion in cost and could sink returns. Gusmão rejected that logic outright. “We did not fight 24 years for independence only to become a passive tax collector,” he said. “If Australia will not bend, we will find partners who will.”
Those partners, officials admit, are almost entirely Chinese. Chinese Foreign Minister Wang Yi visited Dili in December 2024. He brought a $1.8 billion package for the Beaçu industrial zone, a deep-water port upgrade, and a fiber-optic cable to Singapore. Chinese state banks and contractors are already active in Timor-Leste’s ports and highways. Beijing’s chequebook diplomacy has found a willing customer.
The timing matters. Australia has long treated Timor-Leste as its closest northern neighbor, a reliable partner in a volatile region. That assumption is now under direct pressure. Gusmão’s review of every agreement since 2018 covers defense, trade, and infrastructure. It is not a narrow complaint about gas. It is a wholesale re-evaluation of a bilateral relationship built over decades.
For Canberra, the stakes are strategic. A shift by Timor-Leste toward China places a Western ally’s doorstep squarely in Beijing’s sphere of influence. For Dili, the stakes are existential. Oil and gas revenue accounts for the vast majority of government income. The country’s sovereign wealth fund, built on petroleum receipts, is projected to run dry within a decade. Without a new revenue stream, the state cannot function. Greater Sunrise is that stream.
Gusmão’s argument is blunt. Piping gas to Darwin creates jobs in Australia. Piping it to Beaçu creates jobs in Timor-Leste. The extra $5 billion Woodside cites is, from Dili’s perspective, the price of building an economy that does not depend on foreign handouts. If Australian companies will not pay that price, Chinese ones will.
The review opens a window. Beijing is waiting. Wang Yi’s December visit was not a one-off. The $1.8 billion package is already on the table. Whether Australia matches it, or counters with something else, will determine whether Timor-Leste stays in Canberra’s orbit or drifts into Beijing’s. Gusmão has made his position clear. The next move belongs to Australia.
