No ‘legal deal’ yet with China on joint oil exploration at WPS – DoE

Published September 6, 2021, 5:00 AM

by Myrna M. Velasco

The Department of Energy (DOE) has forthrightly stated to Congress that there is no ‘legal deal’ or any form of agreement so far that was reached with China when it comes to join exploration activities for oil and gas at the diplomatically strained West Philippines Sea.

“There’s no joint exploration happening yet between China and the Philippines in the West Philippine Sea…we’re still discussing on the legality of joint exploration if this is in compliance with the Philippine Constitution,” Energy Undersecretary Donato D. Marcos said.

In a hearing at the House of Representatives, he conveyed that the last formal document signed by the two countries was a memorandum of understanding (MOU) — and that was sealed in November 2018.

Marcos explained that under that MOU, the two countries just mutually agreed ‘to talk’ and flesh out possible details of any joint exploration venture that may be advanced at the disputed territories of the West Philippine Sea.

The energy official similarly qualified that the entry of China National Offshore Oil Corporation (CNOOC) as partner for state-run Philippine National Oil Company- Exploration Corporation (PNOC-EC) at Service Contract (SC) 57 in offshore Northwest Palawan had not gotten the final approval yet of the government.

Bayan Muna Party List Representative Ferdinand Gaite asked DOE if the Philippine government has already allowed the entry of Chinese companies for oil and gas exploration business activities in the country; and if the State will give weight to the decision of the United States last year wherein it blacklisted CNOOC as an investor because of China’s bullying toward ASEAN countries – especially those with claims on the South China Sea, including the Philippines.

But Marcos reiterated “there’s no progress on the talks between China and the Philippines on joint exploration;” with him adding that the last dialogue in 2018 had been between the intergovernmental steering committee of the two countries and the talks just circled around the proposed formation of working committees.

Beyond the targeted entry of CNOOC as a partner of PNOC-EC, there are also plans on the part of PXP Energy Corporation of businessman Manuel V. Pangilinan to tap the Chinese firm for a tie-up at its petroleum exploration venture at Recto Bank.

PXP Energy has been seeking the government’s guidance as to the tenor of discussion that it can initiate with CNOOC for a joint venture, but until this time, the DOE is non-committal on that request.

Around September last year, the energy department has prequalified investors for oil and gas exploration at the WPS conflict areas, but until now, the final service contracts have yet to be awarded.

Among the investors that joined the auction for the WPS-straddled service contracts had been PXP Energy, Udenna Energy Corporation of businessman Dennis Uy; and another Filipino firm Troika Giant Power Corporation.

The DOE bidded out the petroleum blocks in the disputed territories of West Philippine Sea even prior to the lifting of exploration moratorium in these areas as announced by the government around October last year. ###

 
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