Philippines’ hopes for South China Sea exploration deal with Russia depends on Moscow’s ties to China, experts say



Duterte needs one eye on Beijing while dealing with Rosneft, observers say

The Philippines is following Vietnam in courting Russia as an oil and gas exploration partner in the South China Sea, where China also lays claim to the waters.

Observers said that while relations with Beijing are high on President Vladimir Putin’s agenda as part of his pivot to the East policy, Russia is unlikely to upset China.

In a move that may further complicate the situation in one of the world’s busiest and most resource-rich waterways, President Rodrigo Duterte of the Philippines urged Russia’s state oil giant Rosneft to consider oil and gas exploration deal in the South China Sea.

That invitation was made during Duterte’s visit to Moscow last week, when he met Rosneft directors, including chief executive Igor Sechin.

“The president invited Rosneft, the leader in the Russian oil sector, to invest in the Philippines, particularly with regard to oil and gas development, and assured its officials … that their investments are safe in the Philippines and that he would not tolerate corruption in the bureaucracy,” Philippines presidential spokesman and chief presidential legal adviser Salvador S. Panelo said on Thursday.

Before Duterte’s meeting with Rosneft’s executives, Carlos Sorreta, Philippine ambassador to Russia, said that Russian energy companies were interested in oil and gas exploration in the Philippines, and any deals with Russia could not compromise Manila’s rights in the region.

“They’re willing to do it within our laws. They’re not a claimant. If they come in, it’s really in full recognition of our sovereign rights and our right to explore,” Sorreta was quoted by news website as saying.

Vietnam accuses Chinese ships of ramping up South China Sea tensions

The role of Russian oil companies in the South China Sea has been in the spotlight since July. Chinese and Vietnamese vessels became embroiled in a stand-off when the Chinese state-owned survey ship Haiyang Dizhi 8 arrived off the Vietnamese coast. It attempted to block oil rig work by Vietnam and Rosneft near Vanguard Bank, a reef which is also claimed by China.

China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei have overlapping claims in the South China Sea, home to US$2.5 trillion in energy reserves.

Beijing warned Vietnam to abandon exploration projects with foreign companies it said threatened China’s sovereignty. Under pressure from Beijing last year, Hanoi halted oil and gas drilling by Spanish partner Repsol.

But Rosneft appeared undeterred, fuelling speculation that Vietnam’s strategy of entangling outside powers such as Russia in South China Sea oil and gas would be a counterweight against Beijing.

“China would not treat the Russian oil exploration project in the same way as it treated the Spanish company,” said Zhang Mingliang, a Southeast Asian expert from Jinan University in Guangzhou, southern Guangdong province.

“There are signs that the Philippines appears to be following Vietnam’s [example] in inviting Russian oil companies to the disputed waters [in the South China Sea], especially when both Vietnam and the Philippines are facing growing crises in energy supply, and Russia companies are ideal partners,” Zhang said.

Beijing deploys new deepwater drilling rig in South China Sea
Artyom Lukin, an associate professor at the School of Regional and International Studies in Russia’s Far Eastern Federal University in Vladivostok, said that while Moscow may want to keep its traditional bonds with Vietnam, a long-term friend and Russia’s most important partner in Southeast Asia, it is unlikely to expand its presence in the South China Sea, which Moscow has “tacitly recognised as China’s geopolitical sphere of influence”.

A partner with China, Russia has taken a neutral position in South China Sea territorial disputes.

Putin publicly sided with China and questioned the validity of a 2016 verdict by an international tribunal at The Hague in the Netherlands which backed the Philippines’ sovereign right to explore oil and gas reserves.

Russian officials, as well as Rosneft and Gazprom, two leading energy companies with joint projects with Vietnam, are tight-lipped about their operations in Vietnam’s offshore areas, Lukin said.

“That said, Moscow does have some interests and stakes in the South China Sea which it will try to protect, even if it means irritating Beijing,” said Lukin.

But Lukin doubted if Moscow would want to risk its relationship with Beijing.

“Albeit a friction point between Beijing and Moscow, the activities by Russian firms in the South China Sea are unlikely to destabilise the all-important Sino-Russian ‘strategic partnership’, and Moscow and Beijing need each other on much bigger issues,” he said.

Aaron Rabena, a research fellow at Asia-Pacific Pathways to Progress Foundation, a Manila-based research organisation, said that it was too early to say if Duterte was following Vietnam’s strategy, especially when Beijing and Manila agreed on a joint oil and gas exploration deal during Duterte’s visit to Beijing in August.

“It remains to be seen if the geographic scope covered [in the China-Philippines agreement] is in the Reed Bank in the South China Sea – especially that a joint development agreement with China is in the works – as there are many other service contracts in the Philippines where the Philippine and Russian governments could cooperate,” he said.