‘Planned joint oil, gas exploration more favorable to China’

WASHINGTON – The planned joint oil and gas exploration between Manila and Beijing in the West Philippine Sea is more advantageous to China, an influential defense think tank said.

RAND Corp. senior defense analyst Derek Grossman said in a meeting with visiting Filipino journalists that the planned joint activity would not work due to sovereign issues.

“The joint exploration for energy resources is probably not gonna work out. It will be on Beijing’s terms if anything. They tell you when, where and how to do it. It’s not gonna eventually lead to more Philippine sovereignty,” Grossman said.

The Philippines and China had officially established a joint steering committee for the proposed joint oil and gas exploration in the West Philippine Sea.

The Philippines-China Inter-governmental Joint Steering Committee on Cooperation on Oil and Gas Development was created in Beijing. It was established in accordance with the memorandum of understanding on cooperation on oil and gas development and the terms of reference that the Philippines and China previously signed. The joint committee agreed to meet again in early 2020.

Both countries are eyeing to explore oil and gas in still undetermined areas in the West Philippine Sea, which may include the resourcerich Reed Bank or Recto Bank. It was declared part of the Philippine Exclusive Economic Zone by the Permanent Court of Arbitration in 2016 in The Hague, Netherlands.

The arbitral tribunal also ruled that China’s massive claim in the South China Sea has no legal basis. Manila calls parts of the South China Sea that falls under its exclusive economic zone as West Philippine Sea.

Reed Bank is vital to Philippine national interest as it is the only replacement for Malampaya, which supplies 40 percent of the energy requirement of Luzon.

Grossman said the Philippines should be wary of entering any energy pact with China and must weigh its costs and the benefits.

“The benefits are trying to smooth out the relationship between China and the Philippines. The Permanent Court of Arbitration ruling in 2016 was pretty clear at least in that particular case that the Philippines had the correct argument in the South China Sea and China ignored it,” Grossman said.

Retired senior associate justice Antonio Carpio had said an oil and gas development agreement between the Philippines and China would be constitutional if Beijing participates with the suggested 60-40 sharing in favor of Manila through a Philippine service contract.