The Philippine Foreign Secretary disclosed that Forum Energy could not proceed in drilling the Reed Bank for, accordingly, Chinese ships are harassing Philippine vessels.
In May 2012, Manny Pangilinan met with CNOOC President Yang Hua to ask China for a joint venture to explore SC-72 to settle the Scarborough Shoal Standoff.
Minister Yang replied that CNOOC has also been awarded by the Chinese government to explore the Reed Bank. Nonetheless, the two governments agreed to a cooperative venture within 12 months from the signing of the MOU.
The two parties failed to settle their differences until after Secretary Teodoro Locsin cancelled the MOU.
Some believe the misunderstanding stemmed from the fact that China wanted to promote its state-owned corporation (CNOOC) while the Philippines wanted to pursue its state-owned PNOC-Exploration Corporation.
In fact, the Philippines granted service contracts to foreign oil companies in violation of our Constitution.
The moratorium referred to by Locsin is to ban the exploration in the Reed Bank under Service Contract 72 granted in 2010 by the Department of Energy to Forum Energy, Limited of which PXP Energy (formerly Philex Petroleum), led by Pangilinan, owns 79.13 percent controlling interest.
Forum Energy is an oil and gas exploration company incorporated in the United Kingdom with focus on the Philippines.
China took note of our joint oil exploration with Dutch Shell and Chevron where we got 10 percent share and 90 percent divided by the two foreign oil companies.
The government was later asked to pay the franchise tax of three percent.
China tried to rectify these inequities by strictly allowing us to observe the 60-40 partition provided in Section 2, Article XII of our Constitution.
The US can never demand the withdrawal of China in the SCS.
Chinese presence is integral to its geographical existence.
While China insists in claiming the so-called Nine-Dash Line, neither did it prevent the US and other naval powers from transiting through the SCS in the exercise of freedom of navigation and its right of innocent passage for commercial shipping.
All that China demanded is for the US to respect existing international laws based on the traditional 12-mile limit for our territorial waters and the 200-mile limit under UN Convention on the Law of the Seas (UNCLOS) or for countries that have shoreline to enjoy exclusive economic zone (EEZ) in the SCS.
Neither can the US accuse China of preventing other naval powers from passing through the SCS without the UN Security Council resolution.
The situation turned complicated because the original objective of exploring and exploiting oil and gas was converted into establishing foreign military bases.
Control of the SCS has become primordial to their own military objective than to controlling the oil and gas deposit.
Things have become politicized that military rather than economic power now predominates the preoccupation of the major powers.
The RP-US military bases agreement has been upgraded to meet the exigencies of the post-Cold War period.
Our approval of the Enhanced Defense Cooperation Agreement (EDCA) indicates the nature of our pact with the US.
It is like having an alliance with two or three countries because of our ideological insecurity without knowing the root cause of our alliance.
The EDCA agreement with the US refers to the three sites in northern Philippines.
These includes a naval base, an airport in Cagayan, and an army camp in Isabela.
The naval base is in Santa Ana which is about 400 kilometers from Taiwan.
Another site is an air base in Balabac Island, off the southern tip of Palawan directly facing the SCS.
Cagayan Governor Manuel Mamba has publicly opposed EDCA.
He fears jeopardizing Chinese investment and becoming a target in a conflict over Taiwan.
The US makes it appear the government steadfastly supports the plan to add four new sites: identified as the Camilo Osias Naval Base in Santa Ana, Cagayan; Camp Melchor Dela Cruz in Gamu, Isabela; Balabac Island in Palawan; and Lal-lo Airport in Cagayan.
Many believe EDCA will give the US the legal anchor to continue its presence in the SCS and to patrol the area as a hegemon.
That now puts the impression that it is our country that sought US assistance to protect us against the possible invasion from China.
Our close relations with Taiwan technically reduced the Philippines to a surrogate state ready to be involved in a proxy war with China.
The US is fully aware the Philippines does not have the means to defend Taiwan and the US is cognizant of that situation.
The concept of a rules-based strategy is always in the mind of the Americans; that the principle represents the majority and think they are right.
Many are questioning this.
First, the context does not fit the condition for which it is applied.
All that the US policy makers do is for the Philippines to accept rather than question the agreement.
Moreover, the US insists its navy has every right to pass through the Strait of Taiwan for as long as they do not block the free passage thereof.
However, the US Navy never bothered to explain that freedom of navigation has limitations.
The catch is that for the US to patrol the Straits of Taiwan would certainly violate the passage because the median that separates China from Taiwan is less than 24 miles measured from the shoreline of the two countries.
In fact, China could prevent the passage of ships, insisting the passage would violate the territorial waters of either country.
Today, this is the cause of the on-going tension between the US Navy and China’s PLA.
All that we know is the intransigence of China to allow free passage in the Strait.