This royalty figure is $8 billion more than the Australian government first proposed seven years ago.

After years of discussions, Australia and East Timor are finalising details on the allocation of oil and gas reserves in a disputed area of the Timor Sea. Both parties have said they expect the deal to be finalised next month.

Meanwhile, ABC Radio reports that further talks in Dili could decide whether Australia or East Timor wins the right to process billions of dollars in gas from the Greater Sunrise Field, operated by Woodside.

Woodside chief executive Don Voelte will meet East Timorese prime minister Mari Alkatiri later today.

East Timor has already secured a deal with Australia for 50% of all revenues from the Greater Sunrise Field.

But the fledgling nation is still saying it wants the gas processed in East Timor rather than being piped to Darwin or processed offshore.

But this would mean piping the gas across the 3000 metre-deep Timor Trough – a massive and expensive task.

The Timorese government recently conceded that the decision on where gas would be processed was best left to the project’s developers, so it is now up to Alkatiri and his colleagues to persuade Woodside.

Previous studies have suggested processing the gas in East Timor would create thousands of jobs give the tiny country an extra $22 billion in revenue, so the government may be inclined to offer generous inducements to the Greater Sunrise partners.

However, Woodside is yet to make any commitment and Sunrise looks like being on hold for several years while the company prioritises development of a new Browse Basin gas hub and expansion of the North West Shelf LNG project.