Palace: 2 S. China Sea areas considered for joint exploration with China

Dharel Placido, ABS-CBN News

Posted at Mar 02 2018 05:06 PM

MANILA - Malacañang on Friday said the Philippines is considering at least two areas in the South China Sea for possible joint exploration with China.

Presidential Spokesperson Harry Roque said Service Contracts (SC) 57 and 72 are being considered for joint exploration “by corporations and not by sovereign states.”

“We are still in the process of negotiating with China,” Roque said of the two SCs in a news conference in Tarlac.

Despite conflicting claims in the South China Sea, the Philippines and China have been open to conducting joint explorations in the disputed waters, setting aside a 2016 international tribunal ruling that invalidated Beijing’s expansive nine-dash line claim to the sea.

A joint exploration, however, is seen as a sensitive undertaking as it could be construed as legitimizing the other side’s claim.

Duterte’s predecessor, Benigno Aquino III, had shunned any joint exploration with China during his time, saying Beijing wanted the Philippines to play by its rules.

Roque said SC 57 is much easier to implement as there is no sovereignty issue there. SC 57 covers offshore Northwest Palawan or west of the Calamian islands.

SC 57 has been pending since 2005 and has been delayed due to administrative issues. According to the contract, state-run China National Offshore Oil Company (CNOOC) farmed-in into SC 57 in 2006 acquiring 51 percent participating interest.

The other firms involved in the project are state-run Philippine National Oil Company - Exploration Corporation and Mitra Energy Ltd (now Jadestone Energy Inc).

The deed of assignment to formalize its entry has yet to be signed by the President.

SC 72, which covers Reed Bank, on the other hand, is also located within the 200-nautical mile (370-km) exclusive economic zone of the Philippines, but it rests in a portion of the sea being claimed by China.

Philippine oil and gas firm PXP Energy Corp, formerly Philex Petroleum, has a 70 percent interest through its Forum Energy subsidiary in the Reed Bank project.

Discussions on SC 72 hit a snag after Aquino questioned the basis of China's claims before an international arbitration court in January 2013, a case that Manila won shortly after he relinquished power to Duterte in July 2016.

Duterte refused to flaunt the ruling, choosing instead to repair diplomatic and economic ties with Beijing as he shifted foreign policy away from Manila's traditional ally, Washington. 

-- with reports from Willard Cheng, ABS-CBN News, and Reuters