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Rodrigo Duterte says Philippines in talks with Chinese state firm on joint exploration of South China Sea

Manila: The Philippines said on Thursday it is in talks with a Chinese state firm for a joint South China Sea energy resource exploration and extraction, in a proposed deal described by President Rodrigo Duterte as akin to "co-ownership" of contested areas.

The two countries have long been embroiled in a bitter dispute over their competing claims to the region – with China claiming nearly the entire sea – but Duterte has in recent years softened his predecessors' policy of opposing Beijing's claims.

Duterte said on Wednesday an arrangement to turn two of the rival claimants into virtual joint owners of the strategic and supposedly oil and gas-rich sea was preferable to the "massacre" of Filipino troops in a war with China.

File image of Philipinnes president Rodrigo Duterte. AP

File image of Philipinnes president Rodrigo Duterte. AP

"Now their (Beijing's) offer is joint exploration, which is like co-ownership. It's like the two of us would be the owners. I think that's better than fighting," he said during a visit to the war-torn southern city of Marawi.

Negotiations between the Philippines and China over South China Sea exploration were raised last month by Filipino foreign secretary Alan Peter Cayetano.

Presidential spokesman Harry Roque provided more detail on Thursday, specifying that talks were underway between the Philippines' energy department and an unnamed Chinese state firm, and that extraction of energy resources was now on the table.

He did not specify which specific area of the sea was under discussion.

Brunei, Malaysia, Taiwan and Vietnam also claim all or part of the sea. Proposed cooperation between Manila and Beijing has caused alarm among neighbouring Southeast Asian countries in the past.

"We might enter into an agreement with a Chinese-owned corporation, not the Chinese state itself," Roque said in an interview aired on ABS-CBN television, adding the company he declined to name was state-owned.

"I know that they're discussing, they're moving forward and it's likely to happen," he added without giving a timetable or the exact terms of the proposed deal.

"This will now actually entail joint exploration and possible exploitation of natural resources."

'Alternative sources'

Duterte's willingness to cooperate with China marks a turnaround from predecessor Benigno Aquino's stance accusing Beijing of encroaching, occupying, and building structures on reefs and rocks that Manila claims as part of its exclusive economic zone.

Aquino won an international arbitration tribunal ruling in 2016 invalidating Beijing's claims, but Duterte set aside the ruling while courting investments and trade from the Philippines' giant neighbour, the world's second-largest economy.

Cayetano said last month that Manila would consult legal experts to make sure any accord would not infringe on Philippine sovereign rights.

"It's not that we have no choice. We can go back and say, 'Fine, no one benefits from the resources now'. But come on, we're trying to look for alternative sources of energy," Roque said on Thursday.

He said Filipino firms could not do it on their own and would need Chinese capital, while noting that "when a Filipino company attempted to explore on its own they were met by Chinese war boats (gunboats)."

He was referring to a 2011 incident when Manila said Chinese patrol boats harassed a seismic survey vessel chartered by a unit of a Philippine mining company at Philippine-claimed Reed Bank in the South China Sea.

Updated Date: Mar 01, 2018 11:33 AM

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