PHL envoy: TOR for possible joint oil, gas exploration in WPS settled

China and the Philippines have agreed on the terms of reference (TOR) for the possible joint exploration of oil and gas in the West Philippine Sea, Manila’s envoy to Beijing Jose Santiago Sta. Romana said Thursday.

Sta. Romana did not disclose details of the project's aims and purposes that were ironed out months after both countries signed last November the memorandum of understanding on oil and gas development when Chinese President Xi Jinping was in Manila.

“In the past two months, last June, the Philippine side submitted its proposed terms of reference to the Chinese side, and the Chinese side agreed to it and submitted their letters, their notes of agreement last July. So that has already been agreed upon,” Sta. Romana told reporters in Beijing.

“Now the question is how to move forward further. And it’s possible the two sides will discuss, you know, the need to form now the joint steering committee and joint entrepreneurial working committees, meaning composed of the companies that will actually be engaged in the cooperation.”

He said the joint exploration contract, should be in accordance with both Philippine and Chinese laws.

“The contract has to be in accordance with the Philippine Constitution and also with UNCLOS [United Nations Convention on the Laws of the Sea]. And since the Chinese are involved, [it] also [should be] in accordance with the Chinese Constitution, I think,” Sta. Romana said.

He said he expects “protracted or intense negotiations on the legal points and legal experts will have to come in and see how they can phrase it in a way that is acceptable to both sides.”

President Rodrigo Duterte is in China for a four-day official visit where he is expected to discuss with Xi later this Thursday ways and means on how to go about the conduct and framework of a possible joint exploration.

Sta. Romana said Duterte was “very much interested to move forward” on the proposed joint exploration, adding that the Malampaya gas reserves off Palawan will soon be depleted.

“Malampaya is running dry. And it’s going to affect our power supply. So that’s why the President is moving with a sense of urgency to move the process forward especially in his last three years,” the Philippine envoy said

The Malampaya gas-to-power facility fuels three gas-fired power plants with a total generating capacity of 2,700 megawatts to provide 30 percent of the power generation requirements of Luzon.

Connected to an onshore gas plant in Batangas, the Malampaya offshore facility in Northern Palawan was inaugurated in 2001. Estimates showed its gas reserves will be sufficient only until 2022 to 2024.

“And so we hope to get it going as fast as possible. But it takes two to tango as they say so. In this case, you need to work together and cooperate. Hopefully we find areas of cooperation with the Chinese side,” the envoy said.

Duterte earlier said he was amenable to a 60-40 sharing in favor of the Philippines.

“They are willing to be flexible. The Chinese has expressed their desire to be flexible and pragmatic because of the improving bilateral relations,” Sta. Romana said when asked if the sharing arrangement was a tacit admission on the part of China that the Philippines has sovereign rights over the West Philippine Sea.

China has accepted the fact that certain areas are undisputed. “So that shouldn’t be a problem,” the ambassador noted.

“So I think the plan is, you know, to get the framework ready so that the steering committee can start the ball rolling and as well as the work groups and they can start meeting,” he said.

“And so that the service contracts that have been affected by the moratorium can also proceed. You know they’ve been put on hold.”

The MOU stated that the Philippines and China agreed to establish an intergovernmental joint steering committee to look into possible energy cooperation.

The committee —to be co-chaired by the foreign ministries and co-vice chaired by the energy ministries — "will be responsible for negotiating and agreeing on 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.”

"Each working group will negotiate and agree on inter-entrepreneurial, technical, and commercial arrangements that will apply in the relevant working area," part of the MOU reads.

Undder the MOU, all discussions, negotiations, and activities of the two governments or their authorized enterprises will be without prejudice to the legal positions of both governments which have been locked in a maritime dispute in the West Philippine Sea, a portion of the South China Sea being claimed by Manila.

The document also stated that it "does not create rights or obligations under international or domestic law.” —LBG/VDS, GAM News