PH, China to set up panel for joint exploration deal | Global News

PH, China to set up panel for joint exploration deal

/ 05:32 AM November 23, 2018

The memorandum of understanding signed by the Philippines and China on Tuesday would set up a body that would work on an agreement for joint exploration of energy sources in the South China Sea, according to Foreign Secretary Teodoro Locsin Jr., who said it was he who drafted the document and not China.

During an interview on CNN Philippines on Thursday, Locsin read portions of the “Memorandum of Understanding on Cooperation of Oil and Gas Development Between the Government of the People’s Republic of China and the Government of the Republic of the Philippines” and described it as a memorandum “to agree to arrive at an agreement.”


Malacañang gave assurance on Thursday that that agreement would be constitutional and beneficial to Filipinos.



Presidential spokesperson Salvador Panelo told reporters that the Philippine government would not accept a deal that would violate the Constitution. “It should be favorable to us,  not only to China,” he said.

Locsin and Chinese Foreign Minister Wang Yi signed the memorandum of understanding in Malacañang during Chinese President Xi Jinping’s state visit to the Philippines on Tuesday. Xi and President Duterte oversaw the signing of the document.

The plan is for the Chinese and Philippine governments to establish an “intergovernmental joint steering committee” and one or more “interentrepreneurial working groups,” Locsin said.

The committee would be chaired by the foreign ministries of both countries and would include relevant agencies, while the working groups would have representatives from enterprises authorized by the two governments, he said.

“The committee will be responsible for negotiating and agreeing [to] the cooperation arrangements in maritime areas to which they will apply, and deciding the number of working groups to be established and for which part of the cooperation area each working group is established,” he said, reading from the document.

The working groups would negotiate and agree on interentrepreneurial, technical and commercial arrangements that would apply in the relevant working area, he added.

According to the document, China would designate China National Offshore Oil Corp. as the Chinese enterprise of each working group.


The Philippines would authorize Philippine National Oil Co. or other enterprises that have service contracts.

“The two governments will endeavor to agree on the cooperation arrangements within 12 months of this memorandum of agreement,” Locsin said.

He said he put in the 12-month period to make it “more concrete.”

The document also states that all discussions, activities and negotiations of the two governments or their authorized enterprises would be “without prejudice to the respective legal positions of both governments,” he said.

“This memorandum of understanding does not create rights or obligations under international or domestic law,” he said.

The document cites the charter of the United Nations, the United Nations Convention on the Law of the Sea, and the 2002 Declaration on the Conduct of Parties in the South China Sea.

It acknowledges that the two governments have made “substantial progress and meaningful gains in exploring opportunities and means to cooperate with each other in maritime activities, which has made significant contributions to peace, stability and development in the region,” Locsin said.

This means the parties agree to the limitations on what states can do and cannot do, he added.

60-40 split

As for the 60-40 profit sharing, he said the working groups would handle the matter.

There is also a moratorium on oil exploration in the West Philippine Sea, and Energy Secretary Alfonso Cusi would need authorization from the President before this could be lifted, he said.

West Philippine Sea is the local name of the waters within the Philippines’ 370-kilometer exclusive economic zone in the South China Sea. —WITH A REPORT FROM CHRISTINE O. AVENDAÑO

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