News / Economy

    Oil Companies Try to Collaborate in Spite of S. China Sea Disputes

    Philippine Energy Secretary Jericho Petilla talks to foreign correspondents during a forum with President Benigno Aquino, Oct. 23, 2013 in Manila. Philippine Energy Secretary Jericho Petilla talks to foreign correspondents during a forum with President Benigno Aquino, Oct. 23, 2013 in Manila.
    x
    Philippine Energy Secretary Jericho Petilla talks to foreign correspondents during a forum with President Benigno Aquino, Oct. 23, 2013 in Manila.
    Philippine Energy Secretary Jericho Petilla talks to foreign correspondents during a forum with President Benigno Aquino, Oct. 23, 2013 in Manila.
    The Philippines and China have developed an openly antagonistic relationship over their South China Sea territorial disputes. But while top officials trade accusations, some groups are looking for ways to compromise and jointly drill for oil and gas. 

    The Philippines' only productive deep-water natural gas project is expected to run dry by 2024.

    Click to enlargeClick to enlarge
    x
    Click to enlarge
    Click to enlarge
    The country is desperate to develop new oil and gas wells in the resource-rich South China Sea. Philippines Energy Secretary Jericho Petilla said he is hopeful about the potential for an unlikely collaboration between U.K.-based Forum Energy and state-owned China National Offshore Oil Corporation (CNOOC).

    "The alternative is not to drill, probably forever... You have to look at the alternatives," he said. "You want to preserve your sovereign rights but at the same time- without actually compromising your sovereign rights, can you come up with commercial [exploration], because we need it."

    Both the Philippines and China need the energy locked underneath the seabed, but they cannot agree on how to divvy it up, since each country claims the region as its own. 

    While that larger issue remains unresolved, energy companies tied to the two nations are trying to find a path forward. Forum Energy is majority-owned by the Philippine-based Philex Petroleum, which has been trying to form a partnership with CNOOC to help it meet a contract to drill two natural gas wells at Reed Bank, just west of the Philippines western-most province, Palawan.

    China claims indisputable sovereignty over practically the entire South China Sea, which Beijing says includes Reed Bank.  The Philippines, Vietnam, Malaysia, Brunei and Taiwan also claim partial or total stakes in the heavily traversed waters. 

    Philippines officials say they are hoping to find a way forward by taking some lessons from a deal between Vietnam and China, which have an arrangement to explore waters in the Gulf of Tonkin in the South China Sea, although exactly how they would divvy up the proceeds of a productive well remains unclear.

    Yang Fang, a researcher at the Center for Asia and Globalization at Singapore’s National University, says the two nations are relying on clauses in the U.N. Convention on the Law of the Sea (UNCLOS) that allow parties in a dispute to have a provisional arrangement regarding maritime borders.  And this provision would be untouched by any final determination of who owns what.

    "Vietnam is more pragmatic and also maintains very open and regular communication with China both through the higher official level meeting and also the party to party communication.  So that the political will is strong and also they can bring it down to the practical level," said Yang Fang.

    Skeptics of the Vietnam / China model, such as Carl Thayer, an expert on South China Sea disputes at the Australia Defense Force Academy, say the agreement gives both parties the appearance of cooperation, while the core disputes remain unresolved.

    "China has hyped these agreements and if you look at them very carefully, they only represent very modest steps forward.  And they don't yet get into joint development," he said.

    Despite optimism from Philippine energy executives about finding a way to strike a deal, President Benigno Aquino has been clear that any partnership between Forum Energy and CNOOC would have to abide by the Philippine position in the dispute.

    "We maintain that the area that Forum Energy is exploring is clearly within our EEZ [exclusive economic zone] and therefore, any exploitation of the same has to be in conformity with our laws," he said.

    The Philippines says China has encroached on its 370-kilometer exclusive economic zone numerous times and it filed a case in January with the International Tribunal on the Law of the Sea to try to reaffirm its claims. A ruling in that case could come as soon as next year.

    You May Like

    Vietnam Urges US to Lift Lethal Weapons Ban Amid S. China Sea Tensions

    US president’s upcoming visit to Vietnam underscores strength of relationship, and lifting embargo would reflect that trust, ambassador says

    Are US Schools Turning a Blind Eye to Radical Qatari Preachers?

    Parade of radical Islamist clerics using mosque at Qatar’s Education City draws mounting criticism for American universities that maintain satellite branches there

    Why Islamic State Is Down But Not Out

    Despite loss of territory, group’s ferocious attacks over past three months seen as testimony to its continued durability and resourcefulness

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Displaced By War, Syrian Artist Finds Inspiration Abroadi
    X
    May 02, 2016 1:36 PM
    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video Kurdish Football Team Helps War-Torn City Cope

    With the conflict still raging across much of Turkey’s predominantly Kurdish southeast, between the rebel PKK and the Turkish state, many Kurds are trying to escape the turmoil by focusing on the success of their football team Amedspor in Diyarbakir. The club is increasingly becoming a symbol for Kurds, not only in Diyarbakir but beyond. Dorian Jones reports from southeast Turkey.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8700
    JPY
    USD
    106.56
    GBP
    USD
    0.6808
    CAD
    USD
    1.2518
    INR
    USD
    66.404

    Rates may not be current.