Page 5 - AsianOil Week 26 2022

AsianOil COMMENTARY AsianOil

and this raises the prospect of the two sides campaign to negotiate an agreement with China
remaining in a deadlock over the question of to resolve their dispute in the South China Sea,
the South China Sea. he has also said he would use the 2016 ruling
to assert the Philippines’ territorial rights. This
Need for fuel represents a turnaround from Duterte, who
The Philippines relies overwhelmingly on fuel had previously indicated that he may have been
imports. The country’s only operational gas field, willing to “set aside” the ruling in an effort to
Malampaya, is currently expected to reach the strengthen ties with Beijing. Marcos’ comments
end of its life by 2027, though the field is under- suggest that finding a way forward jointly with
going a change of ownership and there are hopes China will continue to prove challenging, but
that its lifespan could be extended as a result. (See potentially allows the Philippines to pursue joint
AsianOil Week 22) exploration opportunities with players from
Nonetheless, the country is in need of addi- other countries.
tional resources unless it wants to become On the other hand, Marcos was quoted as
even more import-dependent. However, Chi- telling Wang at his inauguration this week that
na’s overlapping territorial claims in the South good relations between the two countries were
China Sea have made it more difficult for the in the best interests of both. Beijing will be
Philippines to find foreign partners for the pur-
suit of oil and gas development in the region. What next? hoping that a new
Instead, the former government under outgoing The Philippines has frequently lodged diplo- government in
Philippine President Rodrigo Duterte sought to matic protests against China for activities within
improve relations with China, and the two sides its EEZ. While Beijing will be hoping that a new Manila represents
agreed to work together. But observers were government in Manila represents an opportu-
sceptical over the possibility of them ever reach- nity to reset relations between the two countries, an opportunity to
ing an agreement that would allow exploration neither seems likely to back down over the South
to proceed. This was attributed to political sen- China Sea. reset relations.
sitivities, as any deal to share energy resources The situation could also be exacerbated by
could be seen as legitimising the other side’s the fact that the US has backed the Philippines,
territorial claims or even giving away sovereign saying in mid-June that it supported Manila’s
territory. calls for Beijing to end its “provocative actions”
Indeed, a 2016 international arbitration and to “respect international law” in the South
ruling found that the Philippines had sover- China Sea.
eign rights to exploit energy reserves inside its Chinese relations with the US have been
200-mile (322-km) EEZ. However, China has deteriorating and Washington’s support for the
refused to recognise that decision and contin- Philippines when it comes to the South China
ues to claim around 90% of the South China Sea Sea marks a continuation of that. While support
as its territory. could be welcomed by Manila, it nonetheless
While Marcos pledged during his election further complicates the situation.™

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