Philippine joint oil exploration with China: path to peace or pipe dream?

By on May 8, 2018

By Alito Malinao
(Published in Thailand’s The Nation newspaper)

The Philippines’ exuberant announcement that President Duterte and China’s President Xi Jinping had approved a joint oil exploration venture in the South China Sea could turn out to be a pipe dream and could give the Filipino people false hopes.

Following Duterte’s latest trip to China to attend the Boao Forum for Asia, his Foreign Secretary Alan Cayetano announced that the two leaders had “essentially given the go-signal” to work out a framework for the project, with Xi saying that if the Philippines wanted joint exploration, Beijing would be willing “to discuss and find a solution” to the dispute in the South China Sea. Cayetano said that if this venture goes ahead, it could benefit the Philippines on a huge scale since Reed Bank – the area targeted for exploration – has reserves of 5.4 billion barrels of oil and 55.1 trillion cubic feet of natural gas, according a study estimate by the US Energy Information Administration. He added that the planned venture with China could be bigger than Malampaya – the natural gas extraction project with Shell in the waters off Palawan where the government is getting 60 per cent of the net earnings.

But those who are familiar with China’s brand of diplomacy will be wary of Cayetano’s ecstatic pronouncements. Being a lawyer but a neophyte in diplomacy, the foreign secretary should keep his enthusiasm to himself and not jump to a conclusion that could well turn out to be illusory and unattainable. Last March, after meeting with Cayetano in Beijing, China’s Foreign Minister Wang Yi said the two countries would advance cooperation on offshore oil and gas exploration in the contested areas in a “prudent and steady way”, which is the diplomatic way of saying that the arrangement is a long shot. This is China’s standard approach in everything that pertains to the South China Sea. For example, in the crafting of the much-hyped Code of Conduct (CoC) on the South China Sea, China has consistently said it will agree to the adoption of such an accord with the Association of Southeast Asian Nations (Asean). China initially made this commitment in 2012, and at the Asean Summit in Manila in 2017 signed a framework for the adoption of the COC with a one-year timetable for the final signing of the accord. Yet the COC remains conspicuously in limbo, and Singapore, which is chairing Asean this year, has said that it will take years before the accord can be signed, all because China has engaged in diplomatic manoeuvrings to delay its completion. There is good reason to believe this is exactly what is going to happen with the supposed joint oil exploration project over which Cayetano is so euphoric. Serious legal concerns present a formidable obstacle. Our Chief Justice has been unequivocal in saying that such an arrangement with China would violate the Philippine constitution. Antonio Carpio cites the constitutional provision that the state shall protect its marine wealth in its exclusive economic zone and reserve its use and enjoyment exclusively for Filipino citizens. Philippine sovereignty over the contested areas has also been recognised by the Permanent Court of Arbitration in The Hague, in its ruling in July 2016. China must first recognise this sovereignty before any joint undertaking can be done, Carpio said. But will China agree to this? Absolutely not, for two reasons: 1. It does not recognise the arbitral court ruling. 2. Xi himself has said that almost the entire South China Sea has been part of China “since ancient times” and that it is China’s “bounden duty” to uphold its sovereignty in the disputed territory. That is precisely why China’s foreign minister has called for “prudence” in working on any joint oil exploration. And this is what Cayetano should do: He should exercise prudence and restraint in issuing statements regarding this proposed joint project.

Alito L Malinao, a former newspaper editor, now teaches journalism at the University of the City of Manila and is the author of the book “Journalism for Filipinos”.

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