This impasse appeared to have been broken in August 2004 when the two
sides agreed to explore a creative solution to the dispute.
However, it soon
became clear that Australia’s concept of a creative solution diverged from East
Timor’s to a significant extent. East Timor favoured an agreement that would
acknowledge its claims to the seabed and resources located to the east and
west of the existing JPDA. One logical way that this could have been achieved
would have been through an extension of that joint zone arrangement to
encompass additional areas adjacent to the JPDA.