By Kyle Aristophere T. Atienza, Reporter
CHINA is still committed to pursue joint oil exploration activities in the South China Sea with the Philippines and other claimant states, a Chinese envoy said on Thursday, after the Philippine Supreme Court voided a similar deal inked in 2005.
“China remains committed to properly handle maritime disputes in the South China Sea with countries directly concerned, including the Philippines, through dialogue and consultation,” Wang Wenbin, spokesman of China’s Ministry of Foreign Affairs, said in a statement.
It would “actively explore ways for practical maritime cooperation including joint exploration,” he added.
The Supreme Court voided a 2005 government deal with China and Vietnam for joint gas and oil exploration in the South China Sea.
The tribunal had ruled the agreement violated the Constitution for allowing foreigners to explore the country’s natural resources covering 142,886 square kilometers without full state supervision, it said in a statement on Tuesday.
But Mr. Wang said the exploration deal is an “important step” for the three countries to enforce a 2002 declaration signed by Southeast Asian nations and China on the conduct of parties in the South China Sea, adding that it is a “useful experiment” for maritime cooperation among South China Sea claimants.
“It played an important role in promoting stability, cooperation and development in the region.”
The declaration promotes freedom of navigation, peaceful settlement of disputes, and self-restraint in the South China Sea.
The Philippines under former President Gloria Macapagal-Arroyo entered into the joint exploration deal with China and Vietnam through their state-owned oil companies in 2005. These were the state-run Philippine National Oil Co., China National Offshore Oil Corp. and Vietnam Oil and Gas Corp.
The constitution reserves the exploration, development and use of natural resources to Filipino citizens, or corporations or associations that are at least majority owned by Filipinos, the court said.
The ruling came more than 14 years after the plaintiffs filed the lawsuit.
In a statement, the Philippine’s Foreign Affairs department said its policy recommendations are, “at all times” anchored on the Philippine Constitution and laws.
“Cases decided by the Supreme Court form part of our legal system, and the department is duty-bound to take applicable cases into consideration in any future discussion with China on oil and gas,” it added.
But the agency said it was premature to discuss the legal implications of the case on future agreements with China “as substantive discussions have yet to commence.” “We are still in the process of setting the parameters that will guide any future oil and gas talks.”
The ruling is seen as another obstacle to Chinese efforts to revive oil and gas exploration talks with the Philippines.
The latest attempt was made in 2018, when the Philippines under former President Rodrigo R. Duterte signed a memorandum of understanding with China to conduct a joint oil and gas exploration in the disputed waterway.
The Duterte government ended the deal in June, citing constitutional and sovereignty issues.
“It doesn’t really matter what the Ministry of Foreign Affairs says now because our government will have no choice but to follow the Supreme Court decision,” Michael Henry Ll. Yusingco, a policy analyst, said in a Facebook Messenger chat.
“It will be utterly foolish of this administration to proceed with this initiative in any other way or manner other than what the Supreme Court has laid out in this decision,” he added.
In the statement, Mr. Wang noted that during President Ferdinand R. Marcos’ visit to Beijing last week, both sides agreed to “bear in mind the spirit” of the 2018 memo and “resume discussions on oil and gas development at an early date, building upon the outcomes of the previous talks.”
Terry L. Ridon, a lawyer and investment analyst, said any exploration talks with China would now be bound by the tribunal’s decision, which he said “limits exploration, development and use of natural resources to Filipino citizens or companies with at least 60% Filipino equity.”
“With the new ruling, bilateral talks with Beijing will now center on whether China will accede to a minority stake in exploration firms seeking to find oil and gas in disputed waters,” he said in a Messenger chat.
China claims more than 80% of the South China Sea, which is believed to contain massive oil and gas deposits and through which billions of dollars in trade passes each year. It has ignored a 2016 ruling by a United Nations-backed arbitration court that voided its claim based on a 1940s map.
The Philippines has been unable to enforce the ruling and has since filed hundreds of protests over what it calls encroachment and harassment by China’s coast guard and its vast fishing fleet.
China’s aggression had compelled the Philippines to look for foreign partners for its oil and gas exploration activities despite the 2016 international ruling that clarified its territories at sea.
Mr. Yusingco said the high court had shown the Marcos government how to proceed with any gas and oil talks with China, “so it’s only natural to expect the government to follow this consistently and faithfully.”
Meanwhile, research firm GlobalSource Partners in a report said the Marcos government has been managing well the difficult balancing act of reestablishing close ties with the US, while reassuring China about their relations that both have said go beyond maritime issues.
“Playing the ‘friend to all’ card could bring not only direct economic gains in the short term but, through higher level communication lines, avoid more untoward incidents in the disputed waters and in time, bring discussions on joint oil and gas development projects in the [South China Sea] beyond the drawing board,” GlobalSource analyst Romeo L. Bernardo said in the report.
The Philippines also stands to benefit from an expected resurgence in Chinese tourists, improved supply chains and a likely revival of both public and private projects after China’s reopening and exit from its Zero-COVID policy, he said.