MVP to support Duterte’s 60-40 offer to China to explore South China Sea

By on May 8, 2018

BUSINESSMAN Manuel V. Pangilinan on Monday said his company would comply with the wishes of President Duterte should his administration make good on its “60-40” offer to China on a joint exploration of the South China Sea.

“It’s a number that’s not cast in stone. It’s up to the President, as well. If he’s happy with 60 percent, we’ll take it as a marching order,” Pangilinan said.

“Precisely I said, with the issue of the China Sea, leave it at that; it’s geopolitics. Anyway, China has offered joint exploration and joint operation. And I said, maybe, we give you a better deal, 60-40,” he said earlier in a BusinessMirror report.

Asked to comment on this, Pangilinan acknowledged it is the government that would have the final say. “At the end of the day, the proportion of sharing is a number that the government will tell us, what’s acceptable to them.”

Pangilinan is the chairman of PXP Energy Corp., which holds a 60.49-percent interest in United Kingdom-based Forum Energy Plc. which, in turn, has a 70-percent stake in SC 72, an oil-and-gas-exploration permit covering the Sampaguita natural-gas prospect in the Reed Bank, to the west of Palawan.

PXP and China National Offshore Oil Corp. (CNOOC) used to discuss a possible joint exploration of SC72 to develop a part of the Reed Bank. However, the Philippine government has declared force majeure on the license in 2015 due to a territorial dispute with China.

The Philippines eventually won an arbitration case against China over the South China Sea. In particular, the Philippines has exclusive sovereign rights over the West Philippine Sea and that China’s nine-dash line is invalid, the United Nations Arbitral Tribunal said.

Pangilinan said his company sent feelers to CNOOC last year to explore the possibility if both parties can go back to the negotiating table.

“We have not made any contact because we’re waiting for the two governments to sort things out. It looks like they’re moving positively in arriving at something. But of course, we don’t know; we are not a party to their discussions. From what we gather, it’s a positive development, especially the last visit of the president in China,” he said.

When asked about the crafting of a legal framework for the joint exploration between the two countries, Pangilinan said both parties have “engaged both local lawyers and international lawyers to help us craft a legal structure that would test the sovereignty of the Philippine government and what these lawyers think might be acceptable to China.”

PXP is an upstream oil and gas company. It directly and indirectly owns oil and gas exploration and production assets located in the Philippines, and indirectly owns an exploration asset located in offshore Peru.

Pangilinan said the company does not interfere in sovereignty issues, saying the thrust of PXP’s effort at SC 72 is mainly commercial.

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