A board director of state-run Philippine National Oil Company (PNOC) sounded off that incoming President Ferdinand Marcos Jr. will likely revive the "joint exploration deal" with China, indicating that extraction of petroleum resources can finally progress at the contested West Philippine Sea (WPS).
Michael T. Macapagal, a member of the board of directors of PNOC and previously a key executive of one of the largest escrow and title insurance companies in the world, noted that “with a clear mandate from the people, incoming President Marcos Jr. is in a strong position to adopt and implement policies designed to revive the economy -- this includes the revival of the memorandum of understanding (MOU) for joint exploration for oil and gas in the West Philippine Sea.”
Prior to the exit of the Duterte administration, Foreign Affairs Secretary Teodoro Locsin Jr. announced that the Philippine government has already terminated its agreement with China for joint oil exploration activities at the WPS.
But as indicated by Macapagal, the incoming Marcos administration may overturn that decision given outcome of initial studies and seismic data showing the high-yielding potential of blocks at WPS for oil and gas resources.
“The West Philippine Sea--and technical studies bear this out--is rich in oil and gas...under the leadership of President Marcos, we’ll be able to finally end our dependence on imported fuel,” Macapagal stressed.
The Philippines-China MOU prescribing "joint oil exploration" at West Philippine Sea was signed in 2018 -- but since there had been no definitive agreement firmed up by the two countries during the term of outgoing President Rodrigo Duterte, the Philippine government finally opted to pull the plug on that deal last week.
Under the agreement, the royalty sharing will be 60:40 in favor of the Philippine government. It will also be the laws of the Philippines that should be applied in the award of petroleum service contracts.
The DFA, however, did not specify as to what have been the "unresolved issues" in the roughly four years of discussions and negotiations between the two governments that led to the termination of the accord.
In Macapagal’s view, “we shouldn’t close the doors to other players, an American company for instance, or even a German company.”
He qualified that “in any case, we need a foreign partner, and I’m sure President Marcos will be able to get the best deal for the Philippines, whoever that foreign partner may be."
Macapagal emphasized that the technical know-how and expertise of foreign partners will be critically needed in the country’s continued search for oil and gas discoveries at commercial scale.
“Now is the time to put things back on track, with the new president at the helm,” said the board director of the state-run PNOC, who also serves as chairman of Lakas-CMD political party in Olongapo City.