Government to implement 60-40 oil sharing with China in WPS


The Department of Energy (DOE) said it will implement the 60-40 ownership rule in joint explorations with China in the West Philippines Sea (WPS).

Energy Usec. Felix William Fuentebella said during the executive branch’s pre-State of the Nation Address forum on Thursday that both the Philippine and Chinese governments were in talks for the joint exploration. 

But as far as the Philippine government is concerned, he said that they are still bound by the provisions of the 1987 Constitution, which states that foreign ownership of land and businesses is only limited to 40%, while 60% should be owned exclusively by Filipino citizens or corporations.

Energy Sec. Alfonso Cusi earlier said that he was supposed to discuss last year a memorandum of understanding (MOU) with China, which would cover the framework of the joint development in the WPS. The talks were stalled, however, due to the COVID-19 pandemic. 

Cusi said the DOE is still working on the way forward on how they can respond with the joint exploration.

He also confirmed talks between PXP Energy subsidiary Forum Energy and the China National Offshore Oil Corporation, but have yet to come to an agreement. Forum controls Service Contract 72 in the Recto Bank in the WPS.

Pres. Rodrigo Duterte said he’s set to assert the country’s claims if Beijing conducts oil drills in the WPS. Ironically, the chief executive had also said the arbitral ruling favoring the Philippines over China’s incursion in the WPS, which is part of the country’s exclusive economic zone (EEZ), was “just a piece of paper” to be thrown away.

Nonetheless, Cusi said the DOE stands by Duterte’s decision to assert the exclusive licensing authority of the Philippines over petroleum and other resources in the seabed and subsoil of the WPS.

Under the Philippine laws, only the government through the DOE can issue licenses to drill within the country’s territory, including its internal waters, territorial sea, islands, and EEZ.

The possible joint exploration in the WPS follows the MOU signed by Duterte and Chinese president Xi Jinping in November 2018.