Australia and East Timor have agreed on how to share energy resources beneath the sea between them, resolving a long-running dispute.
No details of the deal - which will be signed in January - have been released. But it is believed to give East Timor half the resources from the largest gas field on condition that it defers its claim to a new boundary.
East Timor desperately needs revenues the deal will bring from developing the area's oil and gas fields.
Australian Foreign Minister Alexander Downer said details of the agreement would not be released until a signing ceremony, to be held sometime next month.
But he said he was pleased with the outcome.
"This is a deal which is a good one for both Australia and East Timor," he said.
"It safeguards Australia's sovereign interests and it will provide investors with the certainty needed for large-scale resource projects to go ahead," he added.
Oil companies had deferred work on the biggest gas site, Greater Sunrise, until a deal could be struck.
Currently, Australia is eligible to more than 80% of any revenue from Greater Sunrise, whereas under the new deal, East Timor is expected to get 50% of its resources.
In addition, East Timor will continue to receive 90% of revenues from a joint oil and gas development area.
In return, Dili is expected to suspend talks on finalising a maritime boundary between the two countries.
East Timor was adamant that the line had to be drawn in the middle of the 600km of sea that separates the two countries, which would give it most of the oil and gas resources in the Timor Sea.
But Australia wants to stick with the same frontier it agreed in 1972 with Indonesia, East Timor's former ruler before it gained independence in 2002.
As a result, Australia has been accused of dealing unfairly with East Timor, one of the poorest countries in the world.
TIMOR SEA RESOURCES
Australia and E Timor agreed in 2002 that Dili would get 90% of revenue from the Joint Petroleum Development Area (JPDA).
The JPDA includes some or all of two major resource sites - Sunrise and Troubadaour (known together as Greater Sunrise) and Bayu-Undan.
But E Timor would get more if a maritime boundary in the Timor Sea were re-drawn.
The boundary, agreed in 1972 by Australia and E Timor's former ruler Indonesia, currently gives Australia the lion's share of the resources.
E Timor wants it redrawn at a point equidistant between the two nations. This would give Dili most of the resources.