THE resumption of oil and gas exploration talks between the governments of China and the Philippines faces a new challenge just days after their two leaders enthusiastically announced plans for such: the Philippine Supreme Court declared unconstitutional the 2005 exploration agreement of the Philippines with China and Vietnam.
However, discussions may take a backseat anew after the SC voided a deal between state-run Philippine National Oil Company , China National Offshore Oil Corp. and Vietnam Oil and Gas Corp. involving the exploration of 142,886 square kilometers of the South China Sea under the tripartite agreement for Joint Marine Seismic Undertaking .
One lawyer commented, “there could be an impact on listed companies that have tie-ups with Chinese firms.” Pangilinan, however, clarified that his group still awaits guidance from the government if it can pursue work program on areas covering SC 72 and 75. “We don’t have the authority on the sovereignty issues. We’re walking on egg shells, because if you talk about sovereignty—that’s them [Philippine and Chinese governments] and we have to respect that,” he stressed.
These companies include China Energy International Group Co. Ltd.; China Power International Development Ltd.; SPIC Guangxi Electric Power Co. Ltd.; China Machinery Engineering Corp.; China General Nuclear Power Group; China Huadian Engineering Co. Ltd.; China Tianying, Inc.; Dajin Heavy Industry Co. Ltd.; and Mingyang Smart Energy Group Ltd. Some of these companies already have a presence in the Philippines.
The government is committed to preserve and maintain the investment incentives for service contractors under Presidential Decree 87. This move, Lotilla said, has been met with renewed confidence and strong interest by local and foreign investors in the oil and gas sector.