Australia and East Timor are holding talks in Darwin on the thorny issue of maritime borders.
By Phil Mercer
BBC correspondent in Sydney
Negotiations are expected to be complex as both countries claim the same parts of the Timor Sea, an area with vast reserves of oil and gas.
East Timor badly needs this revenue to modernise its economy.
East Timor wants the border, which currently gives Australia the majority of seabed between them, to run along a line equidistant to the two countries.
East Timor claims a sea boundary 200 nautical miles from its coast, in accordance with international law.
Australia can do the same.
The problem is the two countries are - at the closest point - around 230 nautical miles apart, leading to an obvious overlap.
East Timorese officials will be relying to further their case on the United Nations Convention on the Law of the Sea. It declares that drawing a line halfway between two coastlines is the normal way to establish a frontier, when the countries are less than 400 nautical miles apart.
An agreement could take some time to thrash out.
The Australian Government has said in the meantime that temporary arrangements have been put into place to ensure both sides benefit from the development of petroleum reserves beneath the Timor Sea.
This treaty gives the vast majority of revenue from a shared region spanning 62,000 square kilometres (23,900 square miles) to East Timor.
Money from oil and gas exports is badly needed.
East Timor is still one of the world's poorest countries.
Its economy has suffered from centuries of neglect as a Portuguese colony and decades of conflict under Indonesian rule.
After a traumatic journey, East Timor became fully independent in May of last year.