Manila-Beijing oil and gas deal an 'agreement to agree,' says Locsin

ABS-CBN News

Posted at Nov 22 2018 01:29 PM | Updated as of Nov 23 2018 07:15 PM

China's President Xi Jinping and Philippine President Rodrigo Duterte toast during a State Banquet in Malacanang on Nov. 20, 2018. Mark Cristino/Pool via Reuters

MANILA (UPDATED) -- The Philippines and China agreed to "arrive at an agreement" under a memorandum of understanding on the South China Sea, Foreign Affairs Secretary Teodoro Locsin Jr said Thursday, as he revealed its contents for the first time.

The two countries will set up an inter-governmental joint steering committee that will be "responsible for negotiating and agreeing the cooperation arrangement and maritime areas to which it will apply," Locsin said.

"It is an MOU to agree to arrive at an agreement... an agreement to agree," Locsin said of the deal, which was signed during Chinese President Xi Jinping's state visit to the Philippines.

The MOU "will be without prejudice to the respective legal positions of both governments," Locsin told CNN Philippines, reading from a copy of the deal.

The agreement "does not create rights or obligations under international or domestic law," he said.

"It (MOU) wasn't being pushed by the President. He didn't push it. He didn't tell me anything," he said.

The MOU does not have provisions on profit-sharing, he said. "No, the thing is it's not here (MOU) and that's gonna be worked out by the working groups," he said.

China National Offshore Oil Corp (CNOOC) will serve as the "Chinese enterprise" while Manila will authorize its Filipino counterpart from those with service contracts in the area.

Manila and Beijing are looking at the MOU as "under the charter" of the United Nations Convention on the Law of the Sea and the Declaration on the Conduct of Parties in the South China Sea "with full awareness on what states can and can't do."

Aside from the joint steering committee, Locsin said the MOU also called for the establishment of "one or more" inter-entrepreneurial working groups.

The two nations' foreign ministries will co-chair the steering committee, he said.

Locsin also read parts of the agreement and explained its contents on DZMM Teleradyo Friday.

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The MOU on joint exploration was among 29 deals signed during Xi's 2-day visit to Manila that ended Wednesday.

President Rodrigo Duterte refused to flaunt Manila's legal victory against Beijing in a UN-backed arbitration court, which invalidated China's vast claims in the resource-rich waters.

"The arbitral ruling is now a part of international law. No government, no power on this earth can ever change that unless a new case comes up and they redefine," Locsin said.

"That benefits China as much as it benefits the Philippines because one day, they might need that," he added.

Duterte instead renewed relations with China and sought closer economic and diplomatic ties that were strained by the protest initiated by his predecessor, former President Benigno Aquino.

Last March, PXP Energy said its chairman Manuel V. Pangilinan sent "feelers" to the China National Offshore Oil Co (CNOOC) for possible joint exploration in the disputed South China Sea.

In 2011, Chinese ships chased a vessel contracted by PXP Energy, then known as Philex Petroleum, away from the Reed Bank area. This stalled talks for a potential deal with CNOOC.

Last month, Chinese Foreign Minister Wang Yi said Beijing was "ready to work" with the Philippines and ASEAN towards a code of conduct in disputed waters, which will serve as a "stabilizer" in the region.