No more illusions: Why joint oil and gas talks with China are an exercise in futility
At a time when the Philippines faces mounting pressure in the West Philippine Sea, Manila must be clear-eyed about its choices. The revival of oil and gas talks with Beijing is not a pragmatic solution—it is a strategic mistake.
We have been down this road before, and the results overwhelmingly favored China. First was the unconstitutional Joint Marine Seismic Undertaking (JMSU) that the Arroyo Administration entered into in 2005. The deal enabled Beijing’s state-owned oil company to conduct surveys in parts of the Philippine exclusive economic zone (EEZ) without fully sharing critical data and gave Chinese vessels access to areas of the West Philippine Sea where they had previously maintained little or no presence. Think of the Recto Bank.
Then in 2006, state-owned Philippine National Oil Company (PNOC) moved to partner with China National Offshore Oil Corporation (CNOOC) for hydrocarbon exploration under Service Contract 57 (SC57), a 2,700-square-mile area off Busuanga in Palawan and notably outside the nine-dash line. But the arrangement never moved forward. Philippine policy later shifted toward a more transparent and competitive selection process, and SC57 was eventually reopened to other interested parties. In other words, CNOOC was no longer entitled to special treatment. If it truly wanted in, it could have competed like any other company. Even then, the lesson is clear: if a deal outside the nine-dash line could not proceed, there is even less reason to believe that a more politically and legally contentious arrangement inside the nine-dash line would succeed.
Indeed, the Duterte administration tried it. Between 2018 and 2022, Manila reopened joint oil and gas talks with Beijing, signed a Memorandum of Understanding in 2018, and even lifted the moratorium on exploration in 2020. But after years of signaling flexibility, the process still collapsed in June 2022 because the core obstacles had not changed: Philippine constitutional limits, sovereignty concerns, and China’s refusal to operate on terms consistent with Philippine law and the arbitral award. Once again, the promise of “cooperation” produced more illusion than outcome.
Despite a lack of actual progress, those episodes of giving China preferential treatment handed Beijing propaganda materials to manufacture a false atmosphere of cooperation and compromise while evading accountability for its continued coercion. The Philippines still cannot survey Recto Bank without facing intimidation, Filipino fishermen and Coast Guard vessels continue to be harassed in our own waters, and China continues to ignore UNCLOS and the 2016 Arbitral Award. There is no reason to believe that repeating this process will produce a different outcome.
First, the fundamentals remain irreconcilable.
Any agreement with China must pass two non-negotiable tests: compliance with the Philippine Constitution and consistency with the 2016 Arbitral Award under UNCLOS. Both are fundamentally incompatible with Beijing’s long-standing positions.
The Philippine Constitution (Sec. 2 of Article XII) mandates that the exploration, development, and utilization of natural resources “shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens.” China has never accepted this premise anywhere inside the nine-dash line.
More critically, Beijing continues to reject the arbitral award outright—an award that the National Security Council has rightly declared non-negotiable.
Second, the “middle ground” options are neither viable nor fair.
There are only two theoretical pathways that would not outright violate Philippine law and the arbitral ruling—and both are deeply flawed.
One option is for China to participate as a contractor in a Philippine-led service agreement within Philippine EEZ, outside the illegitimate nine-dash line. As noted, this was tried before. It never moved forward. But it also raises a fairness question: why should the Philippines share its lawful resources with a state that does not recognize Philippine sovereign rights and jurisdiction? That is not cooperation—it is concession under duress. In plain words, still choosing to partner with China on oil exploration inside Philippine EEZ while the coercion continues in other parts of the West Philippine Sea is simply unfair. If our political leaders are so desperate for cooperation with China, then at the very least, let CNOOC submit a bid and compete, just like other companies.
The other option is joint exploration in areas within China’s claimed nine-dash line but outside the Philippine EEZ—essentially, pockets of the high seas. But this runs counter to Beijing’s own position. China claims “indisputable sovereignty” and jurisdiction. Why would it agree to a framework that implicitly dilutes those claims? Has Beijing ever indicated any willingness to subject those areas to joint exploration? More importantly, why should we be complicit in legitimizing the nine-dash line?
By now, it should be obvious that what China seeks is not principled cooperation, but joint exploration specifically within the Philippine EEZ—where it can use the language of “cooperation” to erode Philippine sovereign rights and legitimize its unlawful claims. Our diplomats should pay close attention to what China’s Ministry of Foreign Affairs means by “setting aside disputes and pursuing joint development.” Its first premise is that “the sovereignty of the territories concerned belongs to China.” That alone makes it a non-starter.
In short, neither option is realistic. One is unjust; the other implausible.
Third, it rewards bad behavior while manufacturing the illusion of progress.
China has long used negotiations not to peacefully manage disputes, but to project an image of reasonableness even as it escalates coercion at sea. The point is not genuine compromise, but the appearance of it. Renewed talks allow Beijing to soften international criticism, blunt domestic outrage in the Philippines, and flood the narrative space with slogans about “shared development” and “win-win cooperation,” even as it continues to harass Philippine vessels, intimidate Filipino fishermen, and ignore UNCLOS and the 2016 Arbitral Award, and steal Filipino resources. At home, this also breeds confusion, weakens national consensus, and creates the false impression that cooperation is possible without any meaningful change in China’s behavior. In short, it gives Beijing exactly what it wants: propaganda value, diplomatic optics, and the appearance of progress—without having to give up any of its illegal claims and coercive operations.
Why, then, is the Department of Foreign Affairs helping create that illusion?
The bottom line
We cannot afford another experiment in wishful thinking. Again, we have been down this road before, and multiple times, and the results overwhelmingly favored China. This time, we should know better.
---
Dr. Jeffrey Ordaniel is lead convenor of The Manila Dialogue on the South China Sea and a tenured associate professor of international security studies at Tokyo International University.
- Latest
