Page 11 - AsianOil Week 37

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Philippines flipflops on South China Sea
POLICY
THE Philippine government has retreated from PresideNt Rodrigo Duterte’s comments that he is willing to set aside an international tribunal’s ruling on the South China Sea in order to explore the area jointly with China.
Duterte’s predecessor, Benigno Aquino III, brought a case against China’s claim to more than 90% of the sea before The Hague’s Permanent Court of Arbitration (PCA). In 2016, the PCA dis- missed most of China’s claims as invalid, though Beijing has refused to acknowledge the ruling.
On September 10, Duterte said: “The exclusive economic zone (EEZ) is part of the arbitral ruling, which we will ignore to come up with an economic activity,” the president said at a press conference.
Philippine presidential spokesman Salvador Panelo said during a September 12 press confer- ence, however, that Manila would not abandon the ruling to pursue a joint exploration project with China and that the two governments would continue to negotiate “peacefully” over their competing maritime claims.
“Setting aside doesn’t mean that we will aban- don it. What President [Rodrigo Duterte] means is that, as we have repeatedly said and as he has said too, the arbitral ruling is still subject to talks between the two countries. Negotiation is
ongoing peacefully,” the Manila Bulletin quoted the spokesman as saying.
Duterte had revealed that, during his latest visit to Beijing, Chinese President Xi Jinping had offered the Philippines 60% of revenues gener- ated from the two countries’ joint exploration project. Quoting Xi, Duterte said: “Set aside the arbitral ruling. Set aside your claim. Then allow everybody connected with the Chinese compa- nies. They want to explore and if there is some- thing, they said, we would be gracious enough to give you 60%, they will only get 40%. That is the promise of Xi Jinping.”
Highlighting the challenge that the PCA ruling poses to the Philippines, Duterte noted the only way to enforce his country’s claim was through military action. He said: “You cannot abandon the [ruling]. It’s there. But how to claim back that prop- erty because of the arbitral ruling. China said, ‘That is ours’. The only way to retake is to declare war. Go there and sink all their ships.”™
Vietnam denies ExxonMobil project is at risk
PROJECTS & COMPANIES
THE Vietnamese government has moved to dismiss speculation that Chinese state vessels’ repeated expeditions into Vietnam’s exclusive economic zone (EEZ) could derail the Ca Voi Xanh natural gas development.
Vietnamese Foreign Ministry spokesperson Le Thi Thu Hang told a media briefing on Sep- tember 13 that the Chinese government-owned Haiyang Dizhi 8 had illegally surveyed waters that lay “entirely within the sovereignty and jurisdiction of Vietnam”.
When asked about the Ca Voi Xanh develop- ment, which lies in Block 118 and is being led by US super-major ExxonMobil, the official said the project was continuing as planned.
The Vietnam News Service, citing data from vessel tracking website Marine Traffic, said Hai- yang Dizhi 8 was anchored about 360km from Vung Tau City on September 13.
Speculation over Ca Voi Xanh’s future stems from the fact that Hanoi is suspected of having shelved two offshore projects owing to pressure from China.
Hanoi suspended drilling in Block 136/3, which was licensed to state-owned PetroViet- nam, Spain’s Repsol and the UAE’s Mubadala Development, in 2017. Vietnam then cancelled
Repsol’s development of Block 07/03 in 2018. China’s claims to more than 90% of the South China Sea have also brought it into conflict with the Philippines, Malaysia, Brunei and Taiwan.
The Ca Voi Xanh development includes an off- shore production platform, onshore gas treatment facility and export pipelines to gas-fired power plants. The project is expected to generate $20bn in state revenue and supply enough feedstock to generate 10% of the country’s electricity demand.
This is not the first diplomatic incident that Haiyang Dizhi 8 has triggered, with the ship having completed a 12-day survey of waters near the disputed Spratly Islands in July. Three China Coast Guard vessels escorted the China Geological Survey (CGS) operated ship, which was followed by nine Vietnamese vessels.
The Vietnamese has repeatedly asked Beijing to remove the vessel from the contested waters.™
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