RP, China to map oil deposits in Spratlys

RP, China to map oil deposits in Spratlys

Agence France-Presse, Manila

China and the Philippines are to jointly study potential oil
deposits around the disputed Spratly Islands in the South China
Sea, and Vietnam and other claimants are welcome to take part,
Filipino officials said Thursday.

China National Offshore Oil Corp. (CNOOC) and the Philippine
National Oil Co. (PNOC) signed an agreement in Beijing on
Wednesday to conduct a seismic survey of the area, the officials
said.

Seismic surveys of prospects are the first stage in an oil
exploration project, though Filipino officials insist no actual
drilling for oil would be conducted in the three-year joint
project. The two state firms will split the cost.

The signing was a highlight of the three-day state visit to
China of President Gloria Arroyo, who witnessed the signing.

"The agreement expressly stipulates the principle that the
joint undertaking does not undermine the basic positions of the
Philippines and China of the South China Sea issue, the foreign
department said in a statement.

"There is an understanding between the Philippines and China
that the PNOC-CNOOC undertaking will be open to the participation
of a third party, such as companies of other claimant states," it
said.

"The Philippines will strongly support discussions for the
participation in the undertaking of PetroVietnam, if the company
is interested," it said, referring to Hanoi's national oil
company.

Though the statement did not specify the Spratlys, the island
group is the only known area in the South China Sea where
Beijing, Hanoi and Manila have rival territorial claims.

The archipelago, which sits over rich fishing grounds, lies
near key sea lanes and reputedly sits on vast oil reserves, is
also claimed in whole or in part by Brunei, Malaysia, and Taiwan.

The Philippines energy department said the project "will be a
pre-exploration study solely to collect, process and analyze
seismic data. No drilling or development is covered under the
study."

The foreign department said "the wisdom of the cooperative
efforts like joint development are part of confidence-building
measures pending the final and comprehensive settlement of
territorial disputes and overlapping maritime claims in the
area."

The bilateral agreement "is a step towards possible
discussions in the future between and among claimants on
provisional cooperative arrangements in the South China Sea
pending the complete and final resolution of disputes in the
area."

As it stands, however, Manila was in no position to sign an
exploration or production agreement should the area yield
commercially viable reserves, the foreign department said.

This was because the Filipino constitution explicitly provides
that the Philippine government "should have full control of
activities related to the exploration, exploitation, and
utilization of natural resources in the Philippine territory."