The Philippines’ joint oil and gas exploration venture with China has room for prospective investors from the private sector even as the overall framework is being worked out on the government-to-government level, Energy Secretary Alfonso Cusi said.
Cusi expressed confidence that the terms of reference for the joint exploration would be concluded within the one-year deadline set when the memorandum of understanding was signed in November 2018 during Chinese President Xi Jinping’s visit in Manila.
In an interview with the Inquirer at the sidelines of China’s Belt and Road Forum in Beijing, Cusi said the Philippines was moving to fast-track the agreement.
“We need that for our energy security. With the volatility of oil prices, our dependence on import of oil, we really need to do it fast,” Cusi said.
Cusi said the entities appointed respectively by the Chinese and Philippine governments to spearhead the joint exploration were China National Offshore Oil Corp. (CNOOC) and Philippine National Oil Co. (PNOC), both of which are government-owned corporations. PNOC’s upstream oil, gas and coal exploration arm is PNOC Exploration Corp.
“The private companies, they can join,” Cusi said.
When the MOU was signed last year, it was not clear to many people on whether this would mean that only government or government-owned entities could invest in the joint exploration.
Long before President Duterte restored Philippine diplomatic ties with China in 2016, for instance, Philex Petroleum Corp., had talked with CNOOC about the possibility of an exploration project in Recto Bank a long time ago. These talks did not progress, however, especially when the Philippines’ relationship with China turned sour due to the West Philippine Sea dispute.
“For us, whether it is government or private, it’s okay for as long as we do it according to our laws,” Cusi said.
“We have to do that immediately,” he said.
Cusi said it was possible for the Philippines to work with China on oil exploration without sacrificing its sovereignty claims.
“China acknowledges the importance of us in extracting or exploiting already for our use so with that, I’m sure that China will be cooperative. Let’s just say they are the big brother so I’m sure they will be [cooperative],” Cusi said.
Maritime tension in the West Philippine Sea escalated a few weeks ago with the swarming of Chinese militia around Philippine-administered Pag-asa (Thitu) Island and the illegal harvesting of giant clams. But while China has continued to downplay the 2016 United Nations Convention on the Law of the Sea ruling favoring the Philippines’ territorial rights, tension subsided following the bilateral meeting between Mr. Duterte and Xi last week.