[OPINION] DFA foils oil exploration with China – for now


Foreign Secretary Teodoro Locsin Jr emaciates Beijing’s MOU to start joint development by making it an ‘agreement to negotiate’

It’s back to step one for China and its much-awaited joint development of oil and gas with the Philippines.

In October, after Foreign Minister Wang Yi visited Manila, the Global Times, a subsidiary of People’s Daily, the mouthpiece of China’s Communist Party, heralded: “China and the Philippines are poised to bring their economic cooperation into a new era, and they have a fair chance to achieve the first ground-level implementation of the joint development of oil and natural gas in the South China Sea.”

But when Beijing and Manila signed a Memorandum of Understanding (MOU) on November 20 during President Xi Jinping’s visit, they pushed back the timetable of China by a year as the two governments have yet to craft an arrangement on joint exploration. The MOU gives the two governments 12 months to finalize this.

While the MOU does not specify an area to explore, China has always set its sights on Reed Bank (Recto Bank) in the West Philippines Sea.

The international arbitral tribunal that decided the maritime case of the Philippines against China declared Reed Bank to be within the Philippines’ Exclusive Economic Zone (EEZ). This means that the Philippines has exclusive rights over the resources in the area and countries that want to explore in the Reed Bank should ask the permission of the Philippines and abide by its laws.

The key question for the Philippines is: Will China recognize Philippine sovereign rights over Reed Bank and work within our country’s laws?

Shades of JMSU

In the lead up to Xi’s arrival, Manila buzzed with reports about the signing of a “framework agreement” on joint oil exploration with Beijing. It was to cap the Chinese President’s historic visit.

If it pushed through, it would have marked the resurrection of an arrangement similar to the Joint Marine Seismic Undertaking (JMSU), a controversial agreement with China and Vietnam to survey and drill for oil in Reed Bank inked in 2004 during the term of President Gloria Arroyo.

Initially, Arroyo sealed a deal with China but Vietnam protested vehemently. To appease Vietnam, Manila and Beijing included Hanoi in what became a tripartite agreement