China ‘committed’ to joint oil exploration with Philippines despite court ruling

Beijing says it remains committed to joint oil exploration with Manila in the disputed South China Sea despite a Philippine Supreme Court decision that declared a previous such deal, also involving China, unconstitutional. 

The court this week voided a 2005 agreement with China and Vietnam because it involved wholly foreign-owned companies exploring waters for natural resources belonging to the Philippines. 

During a state visit to China last week, Philippine President Ferdinand Marcos Jr. and Chinese President Xi Jinping agreed to resume exploration talks at “an early date,” after Manila had terminated negotiations in June 2022 due to Beijing’s territorial claims in the sea region.

On Thursday, reporters asked Chinese foreign ministry spokesman Wang Wenbin about last week’s discussions with Marcos in light of the court ruling.

The 2005 deal “was an important step by the three countries to implement the [Declaration on the Conduct of Parties] and a useful experiment for maritime cooperation between parties to the South China Sea. It played an important role in promoting stability, cooperation and development in the region,” Wang said during a daily press conference.

“China remains committed to properly handling maritime disputes in the South China Sea with countries directly concerned, including the Philippines, through dialogue and consultation, and to actively exploring ways for practical maritime cooperation including joint exploration,” he added.

For its part, the Philippine Department of Foreign Affairs said it was still studying the Supreme Court’s decision but that all its “actions and 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,” the department said in a statement Thursday.

The Philippines depends heavily on oil imports but has had a hard time finding foreign partners to help with tapping into its offshore energy reserves because of China’s overlapping claims.

Meanwhile, former Supreme Court Associate Justice Antonio Carpio said the ruling had made the “legal parameters for a joint exploration with a foreign company clearer.”

Manila, he said, could tap Beijing as a “service contractor” to comply with the court ruling.

“The service contractor is the agent and the Philippines government is the principal,” Carpio said in a message to reporters.

“The Philippines will have full control of the operations under the service contract.” 

Manila pushed for a similar direction under Marcos’ immediate predecessor, Rodrigo Duterte. However, Beijing rejected it because it would have been tantamount to acknowledging Philippine sovereignty in the area, a former Department of Energy official involved in the negotiations told BenarNews on Thursday. 

Under Duterte, Manila and Beijing in 2018 signed a Memorandum of Understanding on Cooperation on Oil and Gas Development. 

Last June, Duterte terminated the talks after both sides failed to resolve the issue of sovereignty over Reed Bank, the proposed exploration site, because of Beijing’s claims that overlap with Manila’s in the South China Sea.

China claims nearly all of the South China Sea on historical grounds, including waters within the exclusive economic zones of Brunei, Malaysia, the Philippines, Vietnam, and Taiwan. Beijing also claims historic rights to areas of the waterway that overlap Indonesia’s exclusive economic zone

Beijing has ignored a 2016 international arbitration court ruling won by Manila that invalidated China’s vast claims in the South China Sea. 

Marcos has repeatedly stated that his government would assert the ruling.  Manila already has filed 65 diplomatic protests against Beijing under Marcos’ leadership.

In June, when Manila terminated the exploration deal with Beijing, then-Foreign Affairs Secretary Teodoro Locsin Jr. said both sides had tried their best, local media reported.

Locsin said: “Three years on and we have not achieved our objective – developing oil and gas resources so critical for the Philippines but not at the price of sovereignty. Not even a particle of it.”