Admitting that he drafted the oil exploration deal with China, Foreign Affairs Secretary Teodoro Locsin Jr. said the memorandum of understanding for joint oil and gas development between Philippines and China would uphold the constitutionally-mandated 60-40 profit sharing.
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The MOU, he added, would serve as the basis for future talks on oil and resources exploration with Beijing but do not specify how profits would be split.
This provision was not included in the MOU because the task would be handled by working committees provided under the agreement.
In an interview with CNN Philippines, Locsin said the MOU will create a joint intergovernmental steering committee, with one or more working groups, to aid both Manila and Beijing to come to an agreement within 12 months of the MOU’s signing.
“This memorandum of understanding, in all discussions, negotiations, and activities of the two governments, other authorized enterprises under or pursuant to this memorandum of understanding will be without prejudice to the respective legal positions of both governments. This memorandum of understanding does not create rights or obligations under international or domestic law,” he said.
Locsin also said it was not President Rodrigo Duterte who pushed for the oil and gas deal with China in the disputed waters of West Philippine Sea.
He refused to say who pushed for the agreement, however, saying only that it was “within the government.”
“There wasn’t any deal. In fact, even in, well, frankly, it wasn’t being pushed by the President, but there were forces there saying we should come to an understanding, so there,” Locsin said.
In a Twitter post earlier, Locsin said the DFA had “zero knowledge” of the deal.
On Tuesday, Locsin and Chinese Minister of Foreign Affairs Wang Yi exchanged the signed agreement entitled “Memorandum of Understanding on Cooperation on Oil and Gas Development between the Philippines and China.”
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The MOU will create a body—chaired by the DFA and the Chinese Foreign Ministry—to study the possible joint exploration of the West Philippine Sea.
Both the Philippines and China set a 12-month deadline “to agree on the cooperation arrangements.”
Locsin then said that no Philippine company has been chosen yet for the oil exploration because of an existing moratorium imposed in 2012. He said he could lift the moratorium but would need a go-signal from the President.
The deal on oil and gas exploration was among 29 agreements signed by the two countries during Chinese President Xi Jinping’s state visit this week.
China National Offshore Oil Corp. or CNOOC will serve as the “Chinese enterprise,” while Manila will authorize its Filipino counterpart from those with service contracts in the area.
In March, PXP Energy said its chairman Manuel V. Pangilinan sent feelers to the CNOOC for possible joint exploration in the disputed South China Sea.
Senator Francis Escudero reiterated his call for the government to make public details of the agreements signed with China, particularly the one on oil and gas exploration.
Escudero recalled that during the Arroyo administration, the Philippines, China, and Vietnam entered into an agreement to jointly conduct oil offshore exploration covering both disputed and undisputed waters, also known as the Joint Marine Seismic Undertaking.
However, he said, the agreement was between the countries’ respective oil companies.
He warned that the MOU could have implications on the Philippines’ claims in the West Philippine Sea.
Senate President Pro Temporer Ralph Recto said if the Senate will start floor debates on the 2019 national budget next month, then Cabinet members might be called upon to provide particulars of any of the 29 deals signed during Xi’s state visit.
“More so if the agreement binds us to a project which will be financed by loans, enlarges the national debt, or requires large budgetary counterpart requiring yearly appropriations. Is the project really needed by the people? Or is it supplier driven?” he said.
The price tag of these commitments, he said, must be explained, as well as the benefits to the public. If these are grants and interest-free loans, then the Senate will be advised as well so that it can convey its thanks.
Senator Panfilo Lacson, on the other hand, said it was unfair to accuse President Duterte of having sold the country to the Chinese.
Until and unless the executive makes public the MOUs and MOAs signed during Xi’s state visit, it is premature to draw conclusions, Lacson added.
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