South China Sea: China, Philippines must renew push on oil and gas cooperation as pathway to peace
- Progress on a 2018 agreement on joint exploration was hampered by the pandemic, but the lifting of a Philippine moratorium on such exploration should provide fresh impetus towards a mutually beneficial agreement
To implement the MOU, China and the Philippines formed the Intergovernmental Joint Steering Committee on Oil and Gas Development in October 2019 during the fifth meeting of the Bilateral Consultative Mechanism in the South China Sea.
Vice-Foreign Minister Luo Zhaohui led the delegates from the Chinese steering committee while Department of Foreign Affairs Undersecretary Enrique Manalo led the Philippine team. Both steering committees also included participants from their respective energy department or ministry.
At that first meeting, China and the Philippines discussed several important concerns, including a legal framework for cooperation arrangements, scope of cooperation areas, taxation processes and dispute settlement mechanisms.
After the meeting, both parties agreed to hold the second meeting of the committee in the Philippines in early 2020.
The lifting of the moratorium provides the legal justification for the Philippines to implement the MOU with China. It allows the Philippines Department of Energy to issue a notice to service contractors to resume work on petroleum-related activities in the West Philippine Sea.
There is a need for China and the Philippines to go to the next step of MOU implementation to advance their cooperation in oil and gas development. Both countries have to convene the next meeting of the joint steering committee as soon as possible.
They need to thrash out their differences on the legal and procedural issues of joint development, and find common ground to move forward in their cooperative undertakings, especially in the context of key domestic legal and bureaucratic requirements in the Philippines.
Cooperation in the development of gas and oil tends to be concluded in a conducive environment where good relations exist between parties.
Duterte’s China-friendly policy, reciprocated by a similarly friendly policy of President Xi Jinping towards the Philippines, provides the needed policy environment for both countries to implement the MOU.
China and the Philippines need to strengthen their goodwill and demonstrate sincere political intentions in reaching a mutually beneficial agreement for such purpose.
Pursuing cooperation in oil and gas development offers China and the Philippines the golden opportunity to start building a community of shared future in the South China Sea.
Rommel C. Banlaoi is president of the Philippine Association for Chinese Studies and a member of the board of directors of the China-Southeast Asia Research Centre on the South China Sea