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China dangles 60% oil share

In return for PH to cast aside arbitral ruling

President Rodrigo Duterte said Chinese leader Xi Jinping offered Manila a 60 percent share of proceeds from joint oil exploration in the West Philippine Sea if the government sets aside the 2016 arbitral ruling that invalidated Beijing’s expansive claim to the disputed waters.

“Set aside the arbitral ruling. Set aside your claim,” Duterte said Tuesday night, quoting Xi.

China dangles 60% oil share

“Then allow everybody connected with the Chinese companies. They want to explore. If there is something, they said, we will be gracious enough to give you 60 percent, only 40 percent will be theirs. That is the promise of Xi Jinping,” Duterte said.

Duterte met with Xi two weeks ago while on a five-day visit to China, saying he would invoke the country’s arbitral victory that spelled out the Philippines’ marine entitlements in the South China Sea and junked Beijing’s historic claims.

READ: Xi jilts Duterte on sea claim

But Xi maintained his position that China will not recognize the ruling of the Permanent Court of Arbitration, Malacañang said.

Last week, Duterte said he was not satisfied with Xi’s response but opted not to insist on the matter since the Chinese leader was under stress due to the political unrest in Hong Kong, an administrative region of China.

“Both leaders agreed that while their variant positions will have to remain, their differences, however, need not derail nor diminish the amity between the two countries,” Malacañang said.

During his visit, Duterte also raised the possibility of a joint oil exploration agreement between the two countries.

Asked if the country’s exclusive economic zone will be included in the joint oil venture, Duterte said: “The exclusive economic zone is part of the arbitral ruling which we will ignore for joint activity.”

The Hague-based court ruled in 2016 that the Philippines had legal rights to exploit gas deposits that China also claims in the Reed Bank, about 85 miles off the Philippine coast.

This comes at a time when the country’s gas resources in the Malampaya fields are set to run out by 2024.

Duterte again criticized former Foreign Affairs Secretary Albert del Rosario for being responsible for the loss of the country’s possession of the Panatag Shoal in 2012, which is now under Chinese control.

“What do you want, Del Rosario? You were the one who retreated. You are the foolest (sic) Filipino I’ve met,” he said.

Reacting to the President’s remark,  Del Rosario said the  Arbitral Ruling is already part of international law which clarified the extent of Philippine sovereign rights protected under the Constitution. In particular, the Arbitral Ruling clarified the extent of our exclusive economic zone (EEZ) protected under the Constitution.

The Constitution, which the President has sworn to preserve and defend, mandates that the use and enjoyment of our EEZ is “reserved” exclusively to Filipino citizens, he said. “Moreover, the Constitution expressly mandates the President and our military” to secure the sovereignty of the State and the integrity of the national territory, which includes our EEZ and the West Philippine Sea.”

The former foreign chief reminded the President that to come up with economic activity in our EEZ need not involve setting aside the Arbitral Ruling and running afoul of the Constitution.

‘‘We would like to respectfully emphasize that the President has a choice not to set aside the Arbitral Ruling to come up with an economic activity in our EEZ. If a service contract arrangement is followed, where a Chinese company participates either as an equity holder or a subcontractor, the President would remain faithful to the Constitution and the Arbitral Ruling,”  del Rosario said.

In this way, the President will also not turn back on his promise to the Filipino people made during his October 16, 2016 departure speech, as he embarked on State visits to Brunei Darussalam and China, that he cannot be the sole authorized agent to share with the Chinese, our EEZ which belongs exclusively to the Filipino people.

In the wake of the President’s remarks, Foreign Affairs Secretary Teodoro Locsin Jr. assured the public that the 2016 ruling of the Permanent Court of Arbitration will not be set aside.

Locsin said the memorandum on the joint exploration “makes it unnecessary to set aside the ruling of the arbitral tribunal.”

The terms of reference for the possible joint exploration is very clear in that “no legal position of either side is compromised” when they enter into the agreement, Locsin said.

“It cannot be set aside. What the arbitral award did is that it put the award beyond the reach of compromise. In other words, I don’t care if the Filipino people want to set it aside. No, it is theirs,” Locsin said in an interview with the ANC news channel.

The country’s top diplomat also said that the arbitral ruling is final and binding.

At the same time, he said the joint exploration agreement would cover only “three or four areas” with service contracts and not those areas proposed by China, which he added is well within Philippine territory.

“If the area chosen is a disputed area, but there is no service contract, then it’s still the same, the memorandum of agreement prevails,” Locsin said.

Manila earlier offered an area in the Recto Bank or Reed Bank for exploration, a move China is contesting.

The arbitral ruling has recognized Reed Bank as part of the Philippines’ continental shelf and exclusive economic zone.

But the exploration in the area has been put on hold since 2012 after then President Benigno Aquino issued an order freezing all exploration activities in disputed areas.

Locsin also said under the memorandum of understanding signed last year, a steering committee led by the respective foreign ministers of each country, with the energy ministers serving as vice-chairs would be formed.

Beijing earlier identified China National Offshore Oil Corp. as their company for each working group, while Manila has designated the Philippine National Oil Corp.

Locsin said the steering committee would be “responsible for negotiating and agreeing on the cooperation agreements already between real parties.”

A militant legislator on Wednesday denounced President Duterte’s statement that he is amenable to China’s demand for the Philippines to ignore its legal victory in the South China Sea to push through with the joint oil and gas exploration deal in the disputed waters.

“This amounts to betraying Philippine sovereignty in exchange for another onerous deal just like what happened with the Joint Marine Seismic Undertaking (JMSU) under the Arroyo administration in 2005 which allowed China to find sources of oil in the West Philippine Sea (WPS) in exchange for onerous loans and projects” Deputy Minority Leader and Rep. Carlos Zarate of Bayan Muna said in a statement.

The group said any joint exploration with China, therefore, is unconstitutional as Article XII Sec. 2 of the Philippine Constitution requires that the Philippines fully control any exploration or utilization of its natural resources.

“A joint exploration with China does not grant the Philippines full control since it is a joint undertaking. Any joint exploration with China, therefore, is unconstitutional. In fact, China could very well demand more than 50 percent control of the exploration. China has violated our territorial sovereignty in the WPS. We cannot allow it to trample our Constitution,” the group said.

READ: Government gets seven offers to explore new PH oil and gas fields

READ: Oil investors still keen on West Philippine Sea

Topics: Rodrigo Duterte , Xi Jinping , West Philippine Sea , South China Sea
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