EXCLUSIVE: PH, China appoint members of joint exploration committee

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Metro Manila (CNN Philippines, August 30) — Progress has been made in the Philippines' joint oil and gas exploration deal with China following the appointment of members of the inter-governmental steering committee that would supervise the projects.

A highly-placed source gave CNN Philippines a document showing seven members from the Chinese side, to be led by Vice Foreign Minister Luo Zhaohui as co-chair and Vice Minister Li Fanrong of the National Energy Administration as co-vice chair. The other members are:

• Hong Liang, Director General of the Department of Boundary and Ocean Affairs, Ministry of Foreign Affairs

• Shen Minjuan, Deputy Director General of the Department of Asian Affairs, Ministry of Foreign Affairs

• Gou Haibo, Counselor of the Department of Treaty and Law, Ministry of Foreign Affairs

• Liang Jinzhe, Deputy Director General of the Office of Foreign Affairs Commission of the CPC Central Committee

• Liu Hong, Deputy Director General of the Department of Oil and Gas, National Energy Administration

Meanwhile, the Philippine delegation is composed of eight officials – the co-chair and co-vice chair plus three other members from the Department of Foreign Affairs, and one each from the Department of Energy, Department of Justice, and the National Mapping and Resource Information Authority.

The latest development in the planned joint exploration comes as President Rodrigo Duterte is on his fifth visit to China, where he met with Chinese leader Xi Jinping. Chinese state-run media Xinhua reported that an announcement made after the meeting on Thursday said the two countries are ready to "set up an intergovernmental joint steering committee."

This follows the signing of the terms of reference of the memorandum of understanding (MOU) on cooperation on oil and gas development, which was inked during Xi's state visit to the Philippines in November last year. The MOU states that the two countries agreed to accelerate arrangements for joint exploration in maritime areas in accordance with international law.

It does not specify the areas to be covered, but the Philippines has earlier offered for oil exploration an area in the Recto Bank, also known as the Reed Bank, which China is contesting. The Recto Bank has been eyed as a possible replacement for Malampaya, whose natural gas deposits are expected to run out in ten years. Malampaya accounts for 20 percent of the country's power supply.

China claims the Reed Bank area as part of its territorial waters, but the arbitral ruling, which it rejects, says Reed Bank is part of the Philippines' exclusive economic zone and contentinal shelf, where Manila has exclusive sovereign rights.

The Recto Bank exploration has been put on hold following a 2012 presidential order freezing all exploration activities in disputed areas. It was issued by then President Benigno Aquino III amid rising tensions with China. Duterte has said he might lift the moratorium to make way for the joint exploration.

The MOU says all negotiations done under the agreement "will be without prejudice to the respective legal positions of both governments."

It calls for the creation of working groups that would negotiate the terms of projects in specific areas to be approved by the joint intergovernmental steering committee. Under the TOR, which has been seen by CNN Philippines, the committee and working groups will hold a meeting every three months on agreed dates and venues.

READ: Carpio sees nothing unconstitutional in TOR on PH-China joint oil, gas exploration deal

Each working group would agree on the “inter-entrepreneurial technical and commercial arrangements” for its area of exploration, as the MOU states.

Beijing had appointed the state-owned China National Offshore Oil Corporation (CNOOC) as its representative in all working groups. The Philippines, on the other hand, will assign the company that has an existing service contract with the government in the areas of joint exploration, which have yet to be determined. If there are no such enterprises, the Philippine National Oil Company - Exploration Corporation will represent the country.

A Philippine law, Presidential Decree No. 87, mandates a 60-4O sharing arrangement in revenues from the exploitation of the country's natural resources, with the Philippines taking the bigger chunk. Duterte has long pushed for such arrangement, and China has reportedly expressed openness to it.