RP may seek extension of Spratlys deal, says PNOC head

MANILA, Philippines – Amid the furor over its alleged damaging impact on the country’s territorial claims, the Joint Marine Seismic Undertaking (JMSU) with China and Vietnam in the disputed Spratlys is not heading for an untimely demise, but may even get a new lease on life.

Philippine National Oil Co.-Exploration Corp. (PNOC-EC) president Rafael del Pilar said the government may seek an extension of the deal to validate initial findings of oil and gas potentials in surveyed portions in the South China Sea.

Del Pilar in a telephone interview said Phase 2 of the JMSU is still ongoing and is not expected to be finished by the time the pact lapses in July.

Earlier, Palace officials said the Cabinet is studying the possibility of scrapping the JMSU amid allegations that it was unconstitutional and infringes on the country’s sovereignty. Critics of the administration believe it may even be a ground for the impeachment of President Arroyo.

“I would like to make it clear that we are still in the process of coming up with a recommendation to the DOE (Department of Energy) from a technical standpoint,” Del Pilar told The STAR.

“What happens after that is the decision of the higher authorities if there are other higher political considerations. We’re just dealing on the technical aspects,” he said.

He maintained that the JMSU did not violate any provision in the Constitution or weaken the Philippines’ claim over some islands in the South China Sea that are thought to hold huge oil reserves.

PNOC-EC is the upstream oil and gas subsidiary of the state-owned PNOC. PNOC-EC signed the JMSU in March 2005 with China National Offshore Oil Co. (CNOOC) and the Vietnam Oil and Gas Corp. (PetroVietnam).

Del Pilar explained that initial results of Phase 1 and Phase 2 of the undertaking showed areas with “very little” and “very good potentials.”

He said there is a need to validate the results, especially for areas that could potentially hold commercially-viable quantities of oil and gas. He said work on Phase 2 suffered delays, but he did not elaborate.

“I think it would be necessary to seek an extension to finish this,” Del Pilar said, adding the decision on whether to conduct exploration or not hinges on the results of the seismic work.

Once results turn out to be favorable, he said that would be the time the government would invite the national oil companies of China and Vietnam or other firms to apply for “service contracts” for exploration activities.

He said that in such case, the constitutional provision of 60 percent Filipino ownership would be required.

Del Pilar said an exploration does not automatically result in drilling operations. “There would be numerous drillings to find out if there is oil,” he said.

Meanwhile, Chief Presidential Legal Counsel Sergio Apostol said the Palace is willing to bare details of the JMSU but in a closed-door congressional hearing.

“There is a provision in the contract that the whole thing cannot be revealed to the public…this is a commercial paper, if you reveal its contents, your competitor will know what you’re doing,” Apostol told reporters.

He said CNOOC and PetroVietnam have not indicated whether they plan to extend the JMSU or not.

Nograles not stopping probe

Speaker Prospero Nograles promised yesterday not to prevent any member of the House of Representatives from investigating in aid of legislation the alleged unconstitutionality of JMSU.

“I won’t gag or stop any investigation regarding the subject,” he told The STAR in a text message, when was asked if he would allow 14 of his colleagues – mostly militants – to investigate the controversial JMSU.

Nograles implied that a similar probe by the Senate would not stop House members from conducting their own investigation. “When the resolution reaches the rules committee it will be investigated. That’s the process,” he said.     – Delon Porcalla