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  • Writer's pictureMelo Acuna

Joint exploration may not push through momentarily

Philippines-China joint exploration may take a back seat

MANILA – The expected agreement on the joint exploration of petroleum resources in the South China Sea between the Philippines and China may not be feasible at this time.

This was the collective view of resource persons who spoke over Tapatan sa Aristocrat this morning.

As far as Atty. Jay Batongbacal is concerned the urgency of the agreement may just be for the political side. He explained on the practical side or the need and feasibility of offshore exploration is “rather low” because oil prices are low.

“Oil companies, even state-owned companies, will think twice before spending an enormous amount of money with only ten percent possibility of finding anything,” he said.

The UP College of Law associate dean said it is not urgent for both sides as the two panels or committees are still in a deadlock “how to formulate this agreement” and it is pretty clear they are still on their starting points for negotiations and have not moved much.

Prof. Clarita Carlos, former president of the National Defense College of the Philippines (NDCP) said the key concept is “joint” which means the “jointness should be from the beginning.” However, she said both parties, the Philippines and China are engaged in responding to the COVID-19 pandemic, so this joint exploration will be put on hold.

“We’re moving into renewables, so this becomes less and less salient to everybody,” she said. She added the only reason oil prices have gone up is the collective decision to reduce production.

She said the Philippines and China are into addressing COVID-19 and its aftermath and this will remain the two countries’ priorities.

Asia Pathways to Progress research fellow Lucio Blanco Pitlo III said any agreement that may be reached today may be adversely affected or overturned by the results of the 2022 presidential elections. He was referring to the exploration expected to be made at Reed Bank.

Atty. Batongbacal added as far as the Philippine side is concerned, it is the private sector, the service contractor faces disincentive because oil prices are low and they would negotiate deals with China for the joint exploration. However, the Chinese counterpart would look at the profitability of the agreement and the high risks involved may lead them not to pursue the agreement these days.

“The China National Offshore Oil Company (CNOOC) may decide on a purely political decision, to come up with a ‘paper agreement’ or something to show that there’s a joint development with the Philippines,” he said. Failure to come up with an agreement may lead China to explore the area themselves. He ventured to say an agreement may even tie the Philippines’ hands not to explore the area. He said Malaysia and Vietnam wanted to explore their areas but China wanted them to stop so the oil rigs were escorted by Chinese Coast Guard and Navy to engage the Malaysians and the Vietnamese at sea.

“The political agreement may lead us not to exploring the South China Sea at all for a long time to come,” he explained.

Dr. Aaron Jed Rabena, another research fellow from Asia Pathways to Progress said President Duterte’s priority is to deal with the COVID-19 pandemic.

“I don’t think the political environment is ripe for joint exploration because that would only diminish the political capital of the Duterte government considering how China is seen these days,’ he said.

He suggested both Chinese and Philippine panels should just continue to explore what possible legal frameworks could be arranged but how it will be applied is another matter.

“it may be for the next administration to apply,’ he concluded.

It has been reported state-run CNOOC has. 51% interest in the Calamian project in Palawan, while PNOC has 28 percent stake. (Melo M. Acuña)

Atty. Jay Batongbacal, Dr. Clarita Carlos, Prof. Lucio Blanco Pitlo III and Dr. Aaron Jed Rabena. (Melo M. Acuna Photos)

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