PH, China OK joint SCS oil exploration

The Philippines and China have agreed to set up a special panel to work out how they can jointly explore oil and gas in parts of the South China Sea (SCS) that both sides claim without having to address the explosive issue of sovereignty.

China claims most of the South China Sea, where $3 billion in seaborne trade pass every year, and has competing claims in various parts

of it with Brunei, Malaysia, Taiwan, Vietnam, and the Philippines.

“It’s just the start of a process,” Philippine Ambassador to China Chito Sta. Romana told reporters late on Tuesday after diplomats from both sides met for the second time under a bilateral mechanism aimed at defusing longstanding maritime tensions.

He said the decision to form a working group on cooperating on energy was a “breakthrough.”

Forming an agreement for a joint project would be extremely complex and sensitive as both countries claim jurisdiction of the site of the oil and gas reserves, so sharing them could be deemed legitimizing the other side’s claim, or even ceding sovereign territory.

The idea of joint development was first hatched in 1986, but disputes and the sovereignty issue have stopped it from materializing. But time is of the essence for the Philippines, which relies heavily on energy imports to fuel its fastgrowing economy. That is complicated by estimates that its only domestic natural gas source, the offshore Malampaya field, will be depleted by 2024.

Sta. Romana said a second coordinating group was created to address sovereignty issues and “to prevent any crisis from escalating.”

The Philippines in 2011 accused Chinese ships of harassing a survey vessel hired by Forum Energy, which had won a contract to explore oil and gas in the Reed Bank, near the Spratly.

The Philippines went to the Permanent Court of Arbitration in The Hague in 2013 to question that, among other bones of contention.

The tribunal’s 2016 ruling, which China refuses to recognize, included clarifying that the Reed Bank was within the 200 nautical mile Exclusive Economic Zone of the Philippines and therefore, it had sovereign rights to exploit resources there.

A senior Philippine official also said Southeast Asian countries and China would next month start negotiations on a long-awaited maritime Code of Conduct.

Declaration on SCS

The Philippines and China reaffirmed the importance of maintaining and promoting peace and stability, freedom of navigation in and over flight above the South China Sea (SCS), freedom of international commerce, and other peaceful uses of the sea.

The two countries also agreed to address territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including the Charter of the United Nations and the 1982 UN Convention on the Law of the Seas.

This declaration was issued by both parties during the Second Meeting of the Philippines-China Bilateral Consultation Mechanism (BCM) on the South China Sea hosted by Manila Tuesday.

According to the Department of Foreign Affairs (DFA), the Philippines and China had a frank, cordial, exchange of views on issues of concern on the South China Sea.

"With the objective of maintaining and promoting peace and stability in the region, both sides discussed ways to manage and prevent incidents at sea, promote dialogue and cooperation on maritime issues, and enhance mutual trust and confidence," the DFA said in a statement issued after the meeting. "Both sides had a positive, fruitful and productive meeting."

Confidence-building measures

During the meeting, Manila and Beijing agreed to continue discussions on confidence-building measures to increase mutual trust and confidence and to exercise self-restraint in the conduct of activities in the South China Sea that would complicate or escalate disputes and affect peace and stability.

They also reiterated their commitment to the full and effective implementation of the 2002 Declaration on the Conduct of Parties in the South China Sea in its entirety, and to begin negotiations on a Code of Conduct on the South China Sea early next month, as agreed at the 20th ASEAN-China Summit on November 13, 2017 in Manila.

Likewise, both sides also had productive exchange of views on ways to strengthen cooperation in areas such as marine environmental protection, fisheries, marine scientific research, and oil and gas, without prejudice to their respective positions on sovereignty, sovereign rights, and jurisdiction.

Joint initiatives

Finally, the DFA said there were intensive discussions on mutually beneficial joint initiatives and consensus on the convening of technical working groups in the areas of fisheries, oil, and gas, marine scientific research, and marine environmental protection, and political security, in the framework of the BCM. The technical working groups identified a number of possible cooperative initiatives.

DFA Undersecretary for Policy Enrique Manalo led the Philippine delegation while Vice Foreign Minister Kong Xuanyou headed the Chinese side.

The DFA said the third meeting of the BCM will be held in China in the second half of 2018 at a mutually convenient date.