The projected joint exploration for oil and gas in the West Philippine Sea  (WPS)between the Philippines and China is not yet a done deal but the Department of Energy (DOE) revealed that a memorandum of understanding has been signed and the Philippine side is currently studying the constitutional ramifications of the deal.    

Energy Undersec. Donato Marcos said, “There’s no joint exploration happening yet between China and the Philippines in the West Philippine Sea…we’re still discussing on the legality of joint exploration if this is in compliance with the Philippine Constitution,” Marcos said.

The Energy official noted that the latest formal document signed by the two countries was a memorandum of understanding and that was sealed in November 2018.

Marcos explained that under that MOU, the two countries just mutually agreed ‘to talk’ and flesh out possible details of any joint exploration venture that may be advanced at the disputed territories of the West Philippine Sea.

The Energy official similarly qualified that the entry of China National Offshore Oil Corporation (CNOOC) as partner for state-run Philippine National Oil Company- Exploration Corporation (PNOC-EC) at Service Contract (SC) 57 in offshore Northwest Palawan had not gotten the final approval of the government yet.

Lawmakers asked if the Philippine government has already allowed the entry of Chinese companies for oil and gas exploration business activities in the country. And if the state would consider the US counsel last year to blacklist CNOOC as an investor because of China’s bullying of ASEAN countries – especially those with claims on the South China Sea, including the Philippines.

But Marcos reiterated “there’s no progress on the talks between China and the Philippines on joint exploration,” adding that the last dialogue in 2018 had been between the inter-governmental steering committee of the two countries and the talks just revolved around the proposed formation of working committees.

Beyond the targeted entry of CNOOC as a partner of PNOC-EC, there are also plans on the part of PXP Energy Corporation of businessman Manuel Pangilinan to tap the Chinese firm for a tie-up at its petroleum exploration venture at Recto Bank.

PXP Energy has been seeking the government’s guidance as to the tenor of discussion that it can initiate with CNOOC for a joint venture but until this time, the DOE is non-committal on that request.

Around September last year, the Energy department prequalified investors for oil and gas exploration at the WPS conflict areas but until now, the final service contracts have yet to be awarded.

Among the investors that joined the auction for the WPS dispute-straddled service contracts were PXP Energy, Udenna Energy Corporation of businessman Dennis Uy, and another Filipino firm Troika Giant Power Corporation.

The DOE bided out the petroleum blocks in the disputed territories of West Philippine Sea even prior to the lifting of exploration moratorium in these areas as announced by the government in October last year.