East Timorese opposition political parties are indicating they will oppose ratifying the deal when it goes before parliament, the Weekend Australian has reported.
It is also possible that President Xanana Gusmao could veto the legislation.
East Timorese foreign minister, Jose Ramos-Horta, says his government hopes to sign the full agreement with Australia over the Greater Sunrise gas field in January.
Ramos-Horta said it was the best possible deal for East Timor and it was unlikely that the tiny country could have achieved anything better given the circumstances, according to an ABC Online report.
But many East Timorese interest groups maintain the country is entitled to revenues of at least $US40 billion and the agreement should not be negotiated until Australia's agrees to a new maritime boundary.
Under the deal struck last week, East Timor will receive 90% of energy revenues from the joint petroleum development area (JPDA), about 400km north of Darwin, in exchange for delaying boundary talks for 50 years.
Woodside Petroleum released a positive but cautious announcement last Friday, welcoming the deal but pointing out that it had not yet been ratified.
"The future of the Sunrise Gas Project remains dependent on several factors, including the fiscal regime under which it would operate, the cost and location of any development and the successful marketing of the resource," Woodside said.
Woodside is unlikely to develop its Greater Sunrise field for another 10 years. It warned last year that unless a deal could be struck by Christmas 2004 it would prioritise development of it Browse LNG hub over Sunrise. Since then, Woodside has also discovered Pluto, which it intends to fast-track.
The company is also opposed to the view in Dili that Greater Sunrise gas should be piped across the 3000m deep Timor Trench to East Timor rather than piped to Darwin, which already has an almost complete LNG plant taking gas from Bayu Undan.
Bayu Undan, in the JPDA, provides virtually all East Timor's current petroleum revenue.
But Woodside has said that is considering development of the small Jahal and Kuda Tasi oil fields, also located in the JPDA, tying them back to the Northern Endeavour floating production storage and offtake vessel, which handles Laminaria and Corallina oil production.
This would give East Timor some revenue from Timor Sea developments, albeit on a much more modest scale than Sunrise could have offered.
