Rui Araujo told Fairfax Media the present six-month suspension of East Timor's international legal action over a bitter spy row with Australia was a chance to explore ways to resolve the long-standing dispute over maritime boundaries.

"We respect Australia as a good neighbour, a very open and friendly neighbour, who has helped us in the past and understood our claims about our sovereignty," he said.

"We do not expect that Australia will have to be charitable with Timor Leste, we only expect  that Australia will respect our rights."

Dr Araujo was sworn in on Monday as head of a power-sharing government after an extraordinary handover by independence hero and former prime minister Xanana Gusmao.

A member of the opposition Fretilin party, his accession to the top job has been likened by some commentators to Tony Abbott handing over to Bill Shorten.

Dr Araujo said East Timor was too small for divisive politics. "The pool of talent is very limited," he said. "We came to the realisation . . . we have to call everybody who is willing and who is capable of contributing to the development of this country to participate in the government."

But Dr Araujo dismissed concerns this would leave a toothless opposition, saying under East Timor's constitution - which creates a separate executive - all MPs regardless of their party affiliation had a duty to hold the government to account.

"In the coming weeks we will be presenting our government program and our revised budget because of the new structure of the government, and of course I would not expect everyone to just smile at us and say, 'Good, we'll approve you'."

Swinburne University East Timor specialist Michael Leach said the remake of the government marked a generational transition from leaders that have dominated the country's post-independence politics.

Mr Gusmao has become a minister of planning and strategic investment, with former ambassador to Australia Hernani Coelho taking up the key post of foreign minister.

Dr Araujo was 11 at the time of Indonesia's 1975 invasion, later training as a medical doctor while acting as a clandestine messenger for the resistance.

In his inaugural speech as prime minister on Monday, he said that with more than 50 per cent of East Timor's population younger than 19, governance must be directed to children and young people.

He praised the establishment of country's "Petroleum Fund" to bank proceeds of oil sales, now worth more than  $US16 billion, and told Fairfax Media his vision for 2030 was for East Timor to be an upper-middle-income country, with well educated people and good health.

He said a recent disturbance in the Baucau district, which prompted an update to Australia's travel warning for East Timor, was criminal action against the police.

East Timor's maritime dispute with Australia stems back to 2004 negotiations for a treaty to cover vast undersea gas fields between the two nations, with an estimated worth running to billions of dollars. Australia is accused of spying on East Timor to gain a commercial advantage, leading to international court action.

East Timor is also pushing for resource giant Woodside Petroleum to develop processing facilities in the south of the country, rather than on a floating platform or in Darwin.

Dr Araujo said his approach to the issues would not differ from that of the previous government. "I see the opportunity of advancing on this issue. But I also am aware of the position that both Australia, the government, and oil companies have," he said.

"Of course the opportunity [is] to sit and bring our position to the table and discuss it in an honest and friendly way to achieve a common understanding and get the benefits for both sides."