PH share could go beyond 60% in China-funded joint exploration – Esperon

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National Security Adviser Hermogenes Esperon, Jr. (FILE PHOTO)

Metro Manila (CNN Philippines, October 25) — The Philippines could get an even bigger chunk from the joint oil and gas exploration with China, which National Security Adviser Hermogenes Esperon, Jr. said will be funded "mostly" by Beijing.

"60-40 is a desirable sharing but it is not final. It could even go up to 61 or more," Esperon said in a media briefing on Friday.

"One percent is always substantial when you talk about such big investments," he added.

A Philippine law, Presidential Decree No. 87, mandates a 60-4O sharing arrangement in revenues from the exploitation of the country's natural resources, in favor of the Philippines. President Rodrigo Duterte earlier said Chinese leader Xi Jinping promised to give 60 percent of the revenues from the planned joint projects, as long as the Philippines "sets aside the arbitral ruling."

Esperon said this arrangement is "more than fair," since China will "spend for all the extraction and other things."

Esperon stressed that all these are still subject to change as the inter-governmental steering committee that will supervise the projects will only start the first round of talks next week.

When asked if Manila would also shell out money for the exploration, Esperon said, "As of now it's mostly on their (China) own."

READ: Locsin: PH, China joint exploration to continue 'unless other people step up'

Esperon, chairman of the national task force on the West Philippine Sea, also confirmed that officials are eyeing to explore the west side of Palawan, where Recto Bank, also known as the Reed Bank, is located.

China claims the Recto Bank area as part of its territorial waters, but the arbitral ruling, which it rejects, says the bank is part of the Philippines' exclusive economic zone and contentinal shelf, where Manila has exclusive sovereign rights. The Philippines calls the areas it either claims or occupies in the South China Sea as the West Philippine Sea.

The memorandum of understanding signed during Xi's state visit to Manila last year states that all negotiations and projects done under the agreement "will be without prejudice to the respective legal positions of both governments."

The Recto Bank has been eyed as a possible replacement for Malampaya, whose natural gas deposits are expected to run out in ten years. Malampaya accounts for 20 percent of the country's power supply. But exploration has been put on hold following a 2012 presidential order freezing all exploration activities in disputed areas. It was issued by then President Benigno Aquino III amid rising tensions with China. Duterte is expected to lift the moratorium to make way for the joint exploration.

Duterte earlier said that Esperon would be part of the joint steering committee, but a document obtained by CNN Philippines showed officials from the Department of Foreign Affairs, Justice Department, National Mapping and Resource Information Authority, and Energy Department as members. The Philippine delegation is led by Foreign Affairs Undersecretary for Policy Enrique Manalo and Energy Secretary Alfonso Cusi.

READ: PH, China members of joint oil exploration committee