It was a bilateral treaty between the governments of Australia and Indonesia, which provided for the joint exploitation of petroleum and hydrocarbon resources in a part of the Timor Sea Seabed.

The exact value of the resources contained in the Timor Gap is unknown, but three of the largest reserves, Elang-Kakatua, Bayu-Undan and Sunrise-Troubadour are estimated to hold US$17 billion worth of oil.

[7] The Timor Gap does not refer to any geographical landmark but is instead the area of continental shelf that was subject to negotiations between Indonesia, Australia and Portugal in the early 1970s.

[8] The UN did not recognise Indonesia as the ruling force of East Timor and asserted Portugal as the administering authority of the nation.

[2] However, in 1979 it gave de jure recognition of Indonesian occupation of the country, and began negotiations with Indonesia in relation to closing the Timor Gap.

[2] The extent to which Australia knowingly allowed or encouraged Indonesia to invade East Timor has long attracted international debate.

[2] Indonesia's position was based on the UN Convention on the Law of the Sea (UNCLOS) 1982,[2] which gives a state full and exclusive rights over the 200 nautical miles from its territorial sea baseline, even if its continental shelf is geographically much smaller (unless proved that the continental shelf extends beyond this 200 nautical miles).

[16] Area A, the middle and largest portion of the Gap, was jointly administered by both parties and revenues were divided equally.

[3] The Treaty stipulated that this division of the Zone of Cooperation did not affect the ability for Australia and Indonesia to reach a permanent boundary agreement, and both parties should continue efforts to do so.

[11] Article 6(1) stipulated that the Ministerial Council held "overall responsibility for all matters relating to the exploration for and the exploitation of the petroleum resources in Area A of the Zone of Cooperation", including any policy making.

[11] A number of measures were put in place to ensure that the Ministerial Council held equal representation of both parties.

[16] Article 8 outlined that the Joint Authority was responsible for “the management of activities relating to exploration for and exploitation of the petroleum resources in Area A”.

[16] The Joint Authority supervised the behaviour of these companies to ensure all activities were pursuant to the Treaty's Petroleum Mining Code.

[11] All activities of the Joint Authority were originally funded by Australia and Indonesia, but were intended to eventually be supported by the revenues generated by any mining in Area A.

In 1991, Portugal brought proceedings against Australia in the International Court of Justice (ICJ) in regards to the Timor Gap Treaty.

[3] Had East Timor transitioned to independence immediately without UN administration, customary international law dictates that the nation would have “start[ed] with a clean slate in the matter of treaty obligations”.

[19] This agreement was incorporated into Australian law in the Timor Gap Treaty (Transitional Arrangements) Act 2000 (Cth).

[22] In April 2016, Timor-Leste brought conciliation proceedings against Australia under Annex V of the UNCLOS with the intent of establishing permanent maritime boundaries.

[23] This treaty established permanent maritime boundaries between East Timor and Australia and a framework for resource development.