Carpio: 1972 law turned Reed Bank oil, gas into patrimonial assets

Supreme Court Senior Associate Justice Antonio Carpio on Tuesday said a decades-old law converted the oil and gas in Reed Bank into patrimonial assets.

Earlier, presidential spokesperson Salvador Panelo called Carpio's concern that China may seize the country's gas reserves in Reed Bank if Manila fails to pay its P3.6-billion loan for the Chico River irrigation project "misplaced."

The spokesman said Reed Bank, a public property, cannot be given away, leased, or sold without an enabling law or a presidential proclamation. He said President Rodrigo Duterte has not declared the area patrimonial property.

Patrimonial assets are properties owned by the Philippines that are not for public use, public service, or for development of national wealth.

In response, Carpio said the Department of Energy has already granted a service contract to Forum Energy, an oilfield products company, to exploit the gas in Reed Bank pursuant to the Oil and Exploration Development Act of 1972, as amended.

Section 8 of the law says: "The (service) contract may authorize the Contractor to take and dispose of and market either domestically or for export all petroleum produced under the contract subject to supplying the domestic requirements of the Republic of the Philippines on a pro-rata basis."

"This law proclaims the oil and gas covered by a service contract as subject to sale to the market — which makes such oil and gas patrimonial," Carpio said in a message to reporters.

"The power to reclassify from public domain to patrimonial is a legislative power. The president's power to so reclassify was merely delegated by Congress," he added.

Earlier, the senior High Court justice said that the Philippines "expressedly waived any sovereign immunity" over all its assets except for some, including "public or governmental use as distinguished from patrimonial assets and assets dedicated to commercial use" in its loan agreement with China.

"Patrimonial assets and assets dedicated to commercial use," he said, includes the oil and gas within the Philippine exclusive economic zone in the West Philippine Sea.

"This includes the rich gas fields in Reed Bank," the magistrate said. —KG, GMA News