EXCLUSIVE: MOU for talks on joint oil exploration 'without prejudice' to PH, China legal positions

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Metro Manila (CNN Philippines, November 23) — The memorandum of understanding signed by the Philippines and China creating the framework for future talks on joint oil and gas exploration stipulates adherence to international law and that it will be without prejudice to both governments' legal positions, according to a copy of the document obtained by CNN Philippines.

The two countries have overlapping claims in the South China Sea, which China virtually claims in its entirety. An international abritral tribunal in 2016 largely favored Manila in its maritime dispute with Beijing in the West Philippines Sea — a portion of the sea encompassing the Philippines' Exclusive Economic Zone — but China has ignored the ruling.

The MOU said "in accordance wih the principles of mutual respect, fairness and mutual benefit, flexibility and pragmatism and concensus, through equal and friendly consultation, the two governments have decided to negotiate on an accelerated basis arrangements to facilitate oil and gas exploration and exploitation in relevant maritime areas consistent with applicable rules of international law."

All negotiations under the MOU "will be without prejudice to the respective legal positions of both governments." It also does not "create rights or obligations under international or domestic law," the document added.

It does not specify the maritime areas to be covered, but the Philippines has earlier offered for oil exploration an area in the Reed Bank, which China is contesting.

The document, signed on November 20, says in it is done in the context of the United Nations Convention on the Law of the Sea and the 2002 Declaration on the Conduct of Parties in the South China Sea and positive dialogue between the two countries.

Foreign Affairs Secretary Teodoro "Teddy Boy" Locsin first revealed to CNN Philippines Thursday details of the MOU, saying it would serve as the "architecture" for future talks on oil exploration with the Asian giant.

The MOU said an inter-governmental steering committee as well as a one or more inter-entrepreneurial working groups will be established by both countries. Government officials, relevant agencies, and other individuals from both the Philippines and China will be part of these groups

Locsin said the mechanism could be put in place within 12 months.

"This is valid and it will endure. This is the master framework," Locsin said. "No other country is interested in the development."

He said the committee would be co-chaired by himself and Chinese Foreign Minister Wang Yi and vice-chaired by Energy Secretary Alfonso Cusi and his Chinese counterpart.

The working groups would consist of representatives from enterprises authorized by the two governments. Beijing appointed the state-owned China National Offshore Oil Corporation (CNOOC) as its representative in all working groups. The Philippines will authorize an enterprise or enterprises which has or have entered into a service contract with the government. If there are no such enterprises, authority will be given to the Philippine National Oil Company - Exploration Corporation (PNOC-EC), the documents said.

A copy of the MOU was given to Senate President Vicente "Tito" Sotto III.

It also specified that any information shared between both the Philippines and China will be kept confidential "unless the two governments decide otherwise."

CNN Philippines' copy of the MOU also states a copy was made in Chinese, adding it was equally authentic as the English text.