Philippines and China poised to resume oil exploration but South China Sea claims remain an obstacle

The Philippines has removed a major hurdle in advancing oil exploration with Beijing in the South China Sea, its top diplomat said, but the two nations will have to navigate their overlapping claims in the area to reach a deal.

President Rodrigo Duterte lifted a six-year ban on oil exploration in the South China Sea earlier this month to ensure that talks between Chinese and Philippine entities result in actual projects, Foreign Affairs Secretary Teodoro Locsin wrote in an email last week. China’s initial response to the move “has been very positive”, he added.

The Southeast Asian nation has recently toughened its stance against China and leaned back toward the US, which has also been stepping up its criticism of Beijing’s actions in the disputed waters. The end of the moratorium puts the ball in China’s court, and what it does next will indicate whether tensions with the Philippines ease or intensify.

In 2013, the US Energy Information Administration estimated that 4 trillion cubic feet of gas reserves worth billions of dollars could be found in South China Sea areas claimed by the Philippines and disputed by China. An international arbitration court ruled in favour of the Philippines in 2016, which Duterte recently raised before world leaders at the UN.