DOE Statement on the Announcement of the Termination of Joint Oil and Gas Negotiations with China

The announcement of outgoing Foreign Affairs Secretary Teodoro L. Locsin Jr. on the termination of joint oil and gas negotiations with China has been reported in the news last Thursday (23 June). 

In 2018, the signed Memorandum of Understanding on Cooperation on Oil and Gas Development between the Government of the People’s Republic of China and the Government of the Philippines designated the Department of Energy (DOE) as the Co-Vice Chair in the Inter-Governmental Joint Steering Committee (IGJSC). The IGJSC was established to serve as the official negotiating forum between the two countries on the matter. 

The DOE welcomed this development, as it has always strongly believed in the value of negotiating with China and other claimant-countries such as Vietnam. 

The IGJSC convened only once on 28 October 2019 and no agreement was reached during said meeting.

Despite this, the DOE doggedly promoted exploration in the West Philippine Sea (WPS) through the Philippine Conventional Energy Contracting Program, where it opened areas for application and nomination, reviewed bids, and issued licenses. 

Furthermore, the Department lifted the moratorium on all gas exploration activities in the WPS in October 2020. For the DOE, this decision was an exercise in foresight given the current global energy crisis.

This encouraged our Service Contract (SC) holders to restart investments in WPS exploration. Specifically, SC No. 72 and SC. No. 75 contracted survey vessels to carry out exploration activities in Recto Bank. 

On the DOE’s part, to ensure the safety and security of our oil and gas activities in the WPS, it held 11 meetings and briefings with all concerned service contractors together with maritime law enforcement and security experts in the National Task Force for the West Philippine Sea. 

However, in March of this year, the Security, Justice, and Peace Cabinet Cluster (SJPCC) suspended WPS oil and gas activities. Among the reasons for the suspension was China’s harassment of the survey vessels hired by our service contractors.  At that time, the negotiations with China were also cited as another reason for the suspension. 

The DOE firmly stands for the assertion of Philippine sovereign rights through the promotion of exploration in the WPS.  Following the SJPCC’s suspension order and now with the termination of negotiations with China, the DOE, in coordination with the SJPCC for safety and security concerns, continues to pursue talks with existing service contract holders so they can proceed with their work programs.