China says it has 'reached consensus' with Philippines on South China Sea oil exploration

This satellite photo shows the damage on coral reefs in the Scarborough Shoal due to Chinese fishermen's harvesting of giant clams.
AMTI, file

MANILA, Philippines — China and the Philippines have come to an agreement on the joint exploration of oil and gas resources in the South China Sea, the Chinese foreign ministry said on Friday night. 

This comes after President Rodrigo Duterte, upon the recommendation of the Department of Energy, lifted the moratorium on oil and gas exploration in the resource-rich West Philippine Sea.

"China and the Philippines have reached consensus on joint exploration of oil and gas resources in the South China Sea and set up relevant consultation and cooperation mechanisms. We hope the two sides will work together for new progress in the joint exploration," Zhao Lijian, spokesman for the Ministry of Foreign Affairs of the People's Republic of China, said during a regular press conference. 

Last week, Foreign Affairs Secretary Teodoro Locsin Jr. undertook his first official trip overseas since the onset of the pandemic, traveling to China for a bilateral meeting with his Chinese counterpart. 

A statement released by the Department of Foreign Affairs on October 10 revealed that Locsin and Chinese State Councilor and Foreign Minister Wang Yi discussed "priority political and economic bilateral cooperation initiatives." 

"At the meeting’s close, Secretary Locsin and Foreign Minister Wang confirmed the prospective establishment of a Fast Lane for Urgently Needed Personnel Exchanges between the Philippines and China to facilitate, with due safeguards, the movement of essential official exchanges and travel by personnel in crucial industries such as business and trade, infrastructure, logistics, production, and technical services," the statement further read. 

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Secretary Alfonso Cusi on Thursday confirmed that the Department Of Energy issued a "resume-to-work" notice to service contractors in the areas of service contract (SC) 59, 72 and 75 in the West Philippine Sea. The Philippine National Oil Company-Exploration Corp. operates SC 59, Forum Ltd. operates SC 72 and PXP Energy Corp operates SC 75.

"The lifting of the suspension places the service contractors under legal obligation to put capital into the contract areas and hire Filipino engineers and technical workers to resume exploration," Cusi said, emphasizing that the lifting of the ban would "infuse" the economy with fresh foreign direct investments. The following day, mining and oil stocks in the Philippines soared. 

Sen. Win Gatchalian, chair of the Seante energy committee, on Friday said this was a welcome development, given "the dwindling supply from the Malampaya reservoir which accounts for 20% of power supply of the country and almost 30 percent in Luzon." The Malampaya deep-water gas-to-power project — the only local producer of indigenous natural gas — has been operating since 2001. Its concession contract will expire in 2024.

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