The treaty, which was signed earlier this year in May, creates a joint development area where Australia and East Timor have competing interests, with 90% of revenue going to East Timor and 10% to Australia.

"Ratification of the Timor Sea treaty also serves the Australian national interest in providing the conditions that will allow East Timor economic independence and political and social stability," the committee said in a statement.

However, the Australian Democrats, in a minority report, argue Australia should re-embrace the United Nations Law of the Sea convention to allow a new seabed boundary to be negotiated between Australia and East Timor.

In move described by East Timorese leaders as "unfriendly", Australia withdrew from the convention as it applies to maritime boundaries earlier this year.

The committee also urged an agreement over the Greater Sunrise oil and gas fields, which straddle the joint development area and Australian waters, to be reached by the end of the year.

The partners in the Sunrise field have strongly pressed the Australian Government to insist on a unitisation agreement be completed before the end of the year to govern how the extra revenue will be divided as the development proceeds.