PH can tap China as 'service contractor' in oil, gas exploration —Carpio

The Supreme Court (SC) ruling on the Joint Marine Seismic Undertaking (JMSU) which the Philippines entered into with China and Vietnam in 2005 has made the "legal parameters for a joint exploration with a foreign company clearer," retired Supreme Court Associate Justice Antonio Carpio said on Tuesday.

"This means the four modes in Section 3, Article XII of the Constitution must be followed," he said, referring to "direct undertaking, co-production, joint venture and production sharing."

Carpio said President Ferdinand "Bongbong" Marcos Jr. can pursue a "direct undertaking" and tap the services of a Chinese company in its oil and gas exploration.

"The service contractor is the agent and the PH government is the principal.  The PH will have full control of the operations under the service contract," he said.

"The first whereas clause of every PH service contract states that the oil and gas belong to the Philippines.  Another provision states that PH law shall govern the contract," he added.

Carpio said doing the direct undertaking route in the exploration and having a service contract is the "only way a majority-owned foreign company can participate as service contractor."

The other three modes mandated in the Constitution can only be done with a 60-40 Filipino company, he added.

"This will prevent any administration from straying away from Section 2, Article XII," he said.

On Tuesday, the SC voted 12-2-1 that the JMSU was unconstitutional because it allowed wholly-owned foreign corporations to explore the country’s natural resources.

The JMSU expired on June 30, 2008.

The JMSU is an agreement by the Philippine National Oil Company, the China National Offshore Oil Corp., and the Vietnam Oil Gas Corp. as regards oil exploration in 142,886 square kilometers of the South China Sea.

The case stemmed from the petition filed in May 2008 by then Bayan Muna Party-List representatives Satur Ocampo and Teodoro Casiño assailing the constitutionality of the undertaking.—Tina Panganiban-Perez/Sundy Locus/LDF, GMA Integrated News

“The legal parameters for a joint exploration with a foreign company are now clearer,” he said.