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
“We cannot defeat you (China). We will be pulverized if we go to war. So I will just tell them, ‘If you want to talk, let’s talk. Or you might just want to open this as a mutual corridor and I will be willing to talk to you if there is oil and gas. Let us do it joint exploration.’” (February 4, 2016)
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?
Duterte vows to raise Hague ruling with China “when the minerals are already being siphoned.” (December 29, 2016)
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.
“I really said, ‘It’s ours. I’d like you to listen for a while.’ And I said, ‘Mr Xi Jinping, I would insist that, that is ours and I will drill oil there.’” (May 19, 2017)
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.
“Ngayon, offer nila, eh di joint exploration. Eh di parang co-ownership, parang dalawa tayong may-ari niyan, eh di mas maganda ‘yan kaysa away (They offered joint exploration. So that’s like co-ownership, it’s like two of us own that. That’s better than fighting).” (February 28, 2018)
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.”
“China has offered joint exploration and joint operation. And I said, maybe, we give you a better deal, 60-40.” (April 26, 2018)
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.
“Ang assert ko, ano? Ano, bakit? Iyong oil. Eh kung solohin mo, gulo talaga ‘yan. Because if you struck oil now, ano ba naman ‘yang dagat? Pasagdi. Imo na tanan, suyopa.” (Why will I assert? The oil. If you do it solo, it will be messy. Because if you strike oil now, who cares about the sea? Leave it be. It’s all yours, suck it all up). (August 21, 2018)
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.
“Ang problema ngayon, Indonesia, Malaysia and Brunei, to their maybe good fortunes meron silang oil. Tayo po wala…. ‘Pag magtaas ‘yang oil, you can be sure next week mag-announce na naman ng price increases (The problem is, Indonesia, Malaysia and Brunei, to their maybe good fortunes, they have oil. Us, none… When the oil prices rise, you can be sure next week, they will announce price increases). Because oil is everything.” (October 12, 2018)
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.
“It’s all about oil. When you go out, it’s oil. The roads that you travel on is oil…. Malaysia, Indonesia and the Middle East they are, I said, awash with oil. Tayo, timpla-timpla lang (Us, just a taste).” (October 24, 2018)
Two weeks after, Duterte is still talking about oil. In another speech that day, he mentions it again.
“We need the vital resource of the commodity and it is oil. I don’t know how God managed to calculate the distribution but oil was given to Brunei which is really awash with oil, so with Malaysia and Indonesia. The Philippines, none at all.” (October 24, 2018)
“International Court says…we won. Then he (Xi) said, ‘We’ll just proceed with caution, slowly.’ And now we have – maybe we’ll also try another activity of exploration.” (November 10, 2018)
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