MANILA, Philippines – If all goes according to plan, the Philippines and China may sign a framework agreement on joint exploration in the West Philippine Sea during the visit of Chinese President Xi Jinping to Manila later this month.

Top officials in the Duterte administration are already exchanging drafts of the critical document, envisioned to be a major milestone in the burgeoning Duterte-Xi friendship.

At the center of all these efforts is one crucial resource: oil. This “black gold,” said to be found in abundance in some parts of the West Philippine Sea, is sorely needed by China’s gigantic economy.

In recent months, in a Philippines buckling from soaring inflation and rising fuel prices, President Rodrigo Duterte has also been making the case for why the Philippines should look for more oil reservoirs in its own territory, rather than rely on imports. 

Only last Saturday, November 10, Duterte again brought up oil, even linking it to Xi and the historic arbitral ruling invalidating China’s claim to the West Philippine Sea. He made the speech in Palawan, the island-province just a jetski-ride away from contested waters said to be hiding vast oil reserves.

What has Duterte said about joint exploration for oil with China? Rappler traces his rhetoric – from his first mention of the issue during the 2016 presidential campaign to his recent obsession with oil mere weeks away from the finalization of a joint exploration deal.

In many of his remarks, Duterte tied joint exploration with the Hague ruling, saying he would bring up the award if China insists on taking oil and mineral resources from the West Philippine Sea by themselves. 

Is Duterte using the Hague ruling as the “ace card” he envisioned it would be to get a joint exploration agreement favoring the Philippines’ rights over the West Philippine Sea? The answer lies in the agreement itself.

Duterte’s Rhetoric on Oil, Joint Exploration 

This was Duterte’s first clear stance on joint exploration as a presidential candidate in 2016. Uttered during a forum with businessmen, his remarks showed him appealing to Filipinos’ pragmatism when it comes to the joint exploration debate. Do we leave “still waters” undisturbed because of a stalemate when there are vast sources of wealth waiting beneath? Or do we look for a “compromise” with China so both of us can benefit? The question in people’s minds then were – how big a compromise was Duterte willing to make?

Already a president who had made waves when he said he would shelve the Hague ruling for the moment, Duterte slowly made it clear that he would reserve this “ace card” for the West Philippine Sea’s oil. In his speeches, he made it appear that his non-negotiable is making sure the Philippines gets something out of the sea’s resources.

Fresh from his second trip to China, Duterte made public his supposed exchanges with Xi during one of their bilateral meetings. He again showed his insistence on West Philippine Sea oil but, in the same breath, claimed that Xi asked him not to drill for oil because of China’s claim. If Manila “forces the issue,” Beijing would retaliate, said Xi, according to Duterte’s retelling.

Duterte spoke of an “offer” from China. His use of the word “co-ownership”  worried observers because the West Philippine Sea is part of the country’s exclusive economic zone and the resources in it reserved for Filipinos only, according to the Constitution. 

Less than a month later, Philippine Foreign Secretary Alan Peter Cayetano and Chinese Foreign Minister Wang Yi would formally agree to pursue joint exploration in a “prudent and steady way.”  

Duterte reveals the profit-sharing scheme apparently being discussed in relation to the joint exploration agreement. Cayetano would later say they were going for the “same or better” arrangement as with the Malampaya gas field operated by Shell, Chevron, and the Philippine National Oil Company Exploration Corporation.

When Duterte said this, Manila and Beijing were already working on a draft framework agreement on joint exploration. Days before, Cayetano even expressed optimism that the agreement could be ready by September – or two months before Xi’s visit.

Around the time of this remark, soaring inflation dominated headlines. Only a few days ago, it was announced that inflation hit 6.7%, the highest in 9 years. Malacañang was being pummelled by criticism and Duterte, who had just arrived from Bali, could not help but say there would be no such economic troubles if the Philippines only had more oil reserves. 

Two weeks after, Duterte is still talking about oil. In another speech that day, he mentions it again.

Only two weeks ahead of Xi’s visit, Duterte again linked joint exploration to the Hague ruling. He again claimed he used the arbitral award to get China to make concessions so the two countries could proceed with joint exploration.

He even teased that Israel beat China to the punch. “Ngayon, naunahan sila (They beat them to it).”

A month ago, on October 17, he signed a service contract for an Israeli company to explore for oil and gas east of Palawan.

Will a similar service contract be signed with a Chinese corporation soon? Duterte’s recent words are priming the public for one. – Rappler.com