Oil and gas from Recto Bank by china!

By: Edgar Mana-ay

BOTH Manila and Beijing has confirmed that Chinese companies will explore, drill, and exploit oil and gas deposits at Recto Bank! This shallow part of the West Philippine Sea (WPS) is only 80 nautical miles (nm) from the shores west of Palawan and well within the 200 nm Exclusive Economic Zone (EEZ) limit set by the United Nation Convention on the Laws of the Seas (UNCLOS).

During his latest visit to China, President Duterte agreed to a Memorandum Of Understanding (MOU) to “ALLOW EVERYBODY CONNECTED WITH THE CHINESE COMPANIES” to exploit the oil and gas deposits at Recto Bank, also known by its international name as the Reed Bank.

Chinese President Xi Jinping told DU30 that China agrees to be a JUNIOR partner in the proposed Joint Venture PROVIDED the Philippines SET ASIDE The Hague Arbitral ruling award that went AGAINST China.

Xi was quoted as saying, “Set aside your claim and allow Chinese companies in, if they found something, we will be gracious enough to give you 60%, only 40% will be theirs.”

To this, DU 30 meekly agreed.

It would best for our readers to have a background of the existing gas exploitation contract of our Malampaya gas field, which is now supplying 40% of power plants in Luzon with a total output of 3,211 megawatts (MW), whose gas deposit will be exhausted four to five years from now.

The existing contractor, SPEX (Shell Philippines Exploration B.V.) has partnered in a consortium with Chevron Malampaya LLC and PNOC Energy Corporation (PNOC-EC) which started in the 1980s. Sharing is ALSO 60-40, the 60% going to the Philippine government, and last year it was $1.1 billion directly remitted to the Philippine treasury PLUS A SIZABLE AMOUNT TO PNOC-EC as a Joint Venture (JV) Partner!

It is estimated that PNOC-EC to date has received more than $500 million from the Malampaya project or roughly P100 million per month. (Just imagine how rich PNOC-EC is!)

So you see now how a bully China operates! The bully tells us to set aside The Hague Arbitral ruling in our favor as a condition to offer a “gracious” 60-40 sharing for the Recto Bank gas project! There is nothing gracious with the 60-40 offer, it is already what the Philippine receives from the Malampaya project PLUS a sizeable amount to PNOC-EC a government-owned company as a JV partner.

In the China-proposed venture, PNOC-EC will have no more share and role, it, therefore, cannot serve as “eyes and ears” of the government in the project.

Officers of DU30 have been busy defending the legality and doing damage control on the MOU on oil and gas exploitation at Recto Bank between DU30 and Xi Jinping. According to Justice Secretary MenardoGuevarra:  “There is no sovereignty issues  whatsoever in the Memorandum Of Understanding (MOU) as it just expresses a mutual desire to agree on specific cooperation arrangements which is oil and gas exploitation at the Philippine Recto Bank.”

He further said that the agreement expressly stated that it “shall be without prejudice to the respective legal position of the two governments and does not give rights or obligations under international or domestic laws. “It’s just an MOU, it’s non-committal, non-obligatory and non-binding. It’s just a mere expression of a mutual desire,” Guevarra said.

Foreign Secretary Teddy Boy Locsin also refuted the President statement saying China did not attach such a condition to the proposed oil and gas joint exploration deal.

“I read everything He told Pres. Xi. China has never made setting aside the arbitral award a prerequisite to anything. On the contrary, China agrees with the Philippines to disagree with their respective claims,” Locsin said.

He further said that the preliminary agreement between the Philippine and China WOULD AVOID STATING WHICH COUNTRY WAS ENTITLED TO GAS which is quite weird!

“It’s very clear – no legal issues are compromised if we enter into this agreement,” Locsin said, adding that putting aside the arbitration case was immaterial because the Hague Court had already made its decision. “It’s final and binding,” Locsin added.

Assuming all the legal justifications by the bright boys of DU30 are true, still the majority of Filipinos especially this writer are overwhelmingly against an exploration deal with bully China.

In the US, there is a popular saying which goes this way: “If it isn’t broke, why fix it”. We are experiencing a very harmonious and fruitful relationship with the British (Shell) and American (Chevron) consortium in the exploitation of our gas deposit at Malampaya for more than 20 years now, so why not award to the same consortium the development of the Recto Bank gas reserves.

These two countries are also the source of the best and most advanced technology in offshore drilling to maximize gas deposit withdrawal underneath the sea bed. Why gamble on Chinese companies who are only neophytes and light-years behind the British and Americans in offshore exploration and drilling.

We cannot risk the country’s economic and sovereignty future in a deal with bully China. Let all Filipinos who still love their country pressure the DU30 administration to rescind its MOU with China and award the Recto Bank gas project to the Malampaya contractors already proven for their effectiveness.

Malampaya will run out of gas deposits in 4 to 5 years from now and will result in added financial burden to the Filipinos of P2 billion per day of liquefied natural gas (LNG) importation for Luzon power plants.

The time to start developing the Recto Bank gas deposit is NOW, BUT NOT BY THE CHINESE, because it takes at least 3 to 4 years of development for the gas to flow. In our dealings with bully China, we quote what George Bernard Shaw said: “It is dangerous to be sincere unless you are also stupid”.

Note: The author is a retired Drilling Manager of PNOC Coal Corporation (PNOC-CC)