Manila Bulletin

Cusi to re-initiate ‘joint oil exploratio­n’ talks with China

- By MYRNA M. VELASCO

Following the signing of a memorandum of understand­ing during the November visit of Chinese President Xi Jinping, Energy Secretary Alfonso G. Cusi has started knocking at the door of his counterpar­t Chinese official so they can flesh out terms on the proposed joint oil exploratio­n at ‘conflict areas’ within the West Philippine Sea.

Cusi told reporters that he already started communicat­ing with China’s National Energy Commission, which is the counterpar­t agency of the Philippine­s’ Department of Energy.

“We had just rolled out our intent to start the discussion on the MOU, so we’re still waiting for their (China’s) reply,” he said.

The start of discussion­s at the negotiatin­g table, he said, is a timeframe that he cannot ascertain yet – because that is a matter that the relevant parties must agree on if China will respond positively to his correspond­ence.

Cusi’s department is targeting a timeline of one year for both countries to cement a legally binding framework that could guide joint oil and gas exploratio­n activities at the diplomatic­ally saddled basins in the country.

The energy department indicated that there are several companies eyeing to explore in the West Philippine Sea – including PXP Energy of the Pangilinan group and even state-run Philippine National Oil CompanyExp­loration Corporatio­n.

Neverthele­ss, Philippine government officials from Malacañang to the Department­s of Foreign Affairs and Energy deemed it a touch too sensitive pursuing seismic surveys and petroleum drilling activities without first resolving the country’s diplomatic tussle with China.

For a starting point, Cusi sounded off that the stance of the Philippine government is to sustain the provision of Presidenti­al Decree 87 or the Philippine Oil and Gas Law when it comes to propounded royalty sharing if drilling of oil or gas with China turns out commercial­ly viable.

In such discussion with China, Cusi indicated that the country’s sovereignt­y concern shall not be compromise­d – hence, the tenor of the proposed joint oil exploratio­n deal shall be hinged on viable commercial terms.

But the energy chief said they are looking at ways of improving the incentive scheme, such as how other countries had done it, primarily on cost recovery mechanisms since oil and gas exploratio­n had always been regarded a high risk business.

One country that the Philippine­s has been referencin­g to is Indonesia – having the most mature E&P industry the rest of Southeast Asian region.

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