Maritime dispute not ‘sum-total’ of Philippines-China relationship; temporarily bypass contentious issues and concentrate on joint projects in West Philippine Sea


Jose de Venecia Jr.
Former Speaker of the House

Indeed the maritime dispute in the West Philippine Sea-South China Sea is not the “sum total” of the bilateral relationship between the Philippines and China.

We agree with Foreign Affairs Secretary Teodoro Locsin Jr. and Chinese State Councilor and Foreign Minister Wang Yi to “continue to manage issues of concern” between our two countries and to “promote maritime cooperation in friendly consultation.”

As we have written before, both the Philippines and China should for the meantime bypass the contentious issues and concentrate on a possible unifying objective, a project which both countries can undertake almost immediately or at least relatively shortly.

Both governments can direct their petroleum ministries to identify areas for possible oil-drilling in the West Philippine Sea-South China Sea, preferably in the petroleum-capable Philippine locations in the Recto (Reed) Bank where hydro-carbon discovery of significant commercial content is anticipated.

An initial program of say six exploratory wells to development wells might be programmed under a 60-40 sharing of costs and production with the Chinese state oil companies owning 40 percent, but of course depending on the ownership of the actual site.

Once negotiated and signed by both sides and confirmed by their petroleum ministries, representing both central governments, a drilling program in the sea by a Filipino-Chinese consortium, with a Filipino or Chinese entity designated as drilling operator of the consortium for both sides by common agreement, might designate a third party, say, an experienced American or European oil exploration company, as operator of the consortium.

Both Filipino and Chinese sides must now think in these terms if we are to quickly mobilize a drilling program for the West Philippine Sea-South China Sea, with great anticipation on both sides, since both are starved for crude, and are presently spending great amounts in critical foreign exchange to purchase crude oil from afar in the Persian Gulf or Arab Gulf to the Arabs in the Middle East, from suppliers in Saudi Arabia, Kuwait, and the United Arab Emirates, and Iran. Oman has very much less petroleum.

We have always believed that the raging flashpoint in the South China Sea, with conflicting sovereignty claims, may be settled by temporarily shelving the issue of sovereignty.

We envision joint oil/gas exploration and joint development with an equitable sharing of production and profits; designate “fishing corridors”; convert existing long-standing or newly-built bases into joint tourism sites, weather stations, logistical ports facilities, bases for joint seismic and oil exploration and mining in the South China Sea; eventually demilitarize the disputed islands through the phased withdrawal of armed garrisons; and covert the zone of conflict into a zone of peace, friendship, cooperation, and development.

We believe this is the most realistic, most common-sensical solution to the problem of the Spratlys among the so-called frontline states of the Philippines, China, and Vietnam, which should be joined by Malaysia, Brunei, and Taiwan.

This could also be the solution to the perilous problem between China and Japan in the Senkaku or Diaoyu Straits in the East China Sea.
Of course, it is easier said than done but we should consider the most practical, most sensible, and most realistic win-win compromises necessary for the geo-political settlements in the South China Sea conflict.

In Western Europe, the North Sea powers, including the United Kingdom, Norway, and Germany, undertook a peaceful median line partition of the North Sea. In the Norwegian oilfield of Ekofisk, the oil flows to Teesside in England and Stavanger in Norway and the gas to Bremen, Germany, the result of peaceful, friendly dialogue and practical geo-political settlement.
We remember leaving behind our son Joey III and daughter Vivian, who were both under ten years old then, in Stavanger in Norway when we boarded a helicopter, accompanied by our nephew Ramon San Jose III, to visit the petroleum operations in the North Sea in the 1970s. We were then president of the Petroleum Association of the Philippines.

The North Sea agreement among the United Kingdom, Norway, and Germany is a classic example of how we should resolve the problem in the South China Sea where the Philippines, China, and Vietnam can and should enter into a consortium and share the cost and benefits of stratigraphic drilling and production and where American and European participation can even be considered.

What is important is that the parties must agree on a location of the drilling site whether on the Philippine side, China side, or Vietnam side so that the sharing of petroleum discovery can be distributed accordingly, including the engagement of American or European participants in the event that the consortium engages a Western drillship or a designated common consortium operator.