China Welcomes Private Firms In Oil Gas Exploration Venture

Oil Rig
FILE PHOTO: Men work on an oil rig at Sinopec's Shengli oil field in Dongying, Shandong province, China September 2, 2011. (Photo: REUTERS/Aly Song/File Photo)

Philippines Energy Secretary Alfonso Cusi said that the joint venture of the Philippines and China to dig oil welcomes prospective investors from the private sector despite the fact that the overall framework is being handled on the government-to-government level.

Cusi is confident that the terms of reference for the joint exploration would be finalized within the one-year deadline set following the signing of the memorandum of understanding during the visit of President Xi Jinping to Manila in November 2018.

Cusi said during an interview with reporters at the sidelines of China's Belt and Road Forum in China that the Philippines were moving to speed up the agreement. He said that the Philippines need energy security. He added that with the volatility of oil prices, the country's dependence on import of oil, it really needs to do it fast.

Cusi said that the entities that were appointed by the Chinese and the Philippine government that will spearhead the joint exploration are the China National Offshore Oil Corp. (CNOOC) and Philippine National Oil Co. (PNOC). The two companies are both government-owned corporations. PBOC Exploration Corp acts as the arm of the PNOC in its upstream oil, gas, and coal exploration.

Cusi announced that private companies can join the exploration. There were rumors last year during the signing of the memorandum of understanding that only government or government-owned entities could invest in the exploration.

Philex Petroleum Corp negotiated with the CNOOC on the possibility of an exploration project in Recto Bank long before President Duterte restored Philippine diplomatic ties with China in 2016. The negotiation, however, failed especially after the relationship of the two nations turned sour because of the dispute in the West Philippine Sea.

Cusi said that for the Philippines, whether it is government or private, it's okay for as long as we do it according to our laws. He added that they have to do the joint venture immediately. He also pointed out that there is a high possibility for the Philippines to work with China on oil exploration without sacrificing its claims of sovereignty.

According to Philippine Ambassador to China Jose Santiago Sta. Romana, it will still take many steps to complete the agreement from the memorandum of understanding. He, however, noted that the discussions on the oil exploration were moving forward.

Sta. Romana also said that the Philippines and China's bilateral relations basically consist of two general areas which included the disputes and the areas where there are no disputes.

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