FOREIGN Affairs Secretary Ma. Theresa P. Lazaro confirmed that early talks are happening for possible oil and gas exploration in the West Philippine Sea (WPS). The discussions involve businessman Manuel V. Pangilinan’s group and Chinese companies.
But Lazaro told BusinessMirror that the proposals are still ‘highly tentative,’ with no formal meetings or firm agreements yet.
The topic first came up during Tuesday’s Senate budget hearing when Senator Imee Marcos asked if the talks were reviving the old oil deal between former Foreign Secretary Teodoro Locsin Jr. and Chinese Foreign Minister Wang Yi. Lazaro replied, ‘That’s true. But this is purely private,’ clarifying that the initiative is led by private companies, not the government.
In December 2022, Pangilinan said his team had met with Chinese firms to explore joint oil and gas development in the West Philippine Sea. He clarified that China National Offshore Oil Corporation (CNOOC), which nearly secured an exploration deal with his group back in 2012, was not involved in these recent talks. He also stressed that any future agreement must follow Philippine laws and the Constitution.
This October, Pangilinan’s PXP Energy Corp. received three new petroleum service contracts from the Department of Energy for areas in the Sulu Sea and Northwest Palawan.
Efforts to restart joint oil exploration between the Philippines and China have stalled due to legal issues. A 2023 Supreme Court ruling declared the 2005-2008 Joint Marine Seismic Undertaking with China and Vietnam unconstitutional, making future deals harder.
Under Philippine law, only companies that are at least 60 percent Filipino-owned can join production-sharing agreements. Foreign firms can only participate as service contractors under full government control.
Coast Guard cooperation
While oil talks remain uncertain, maritime cooperation between the Philippine Coast Guard (PCG) and China’s coast guard is close to being finalized.
Lazaro said the proposed Memorandum of Understanding (MOU) is ‘more substantive’ and could be signed soon. It focuses on practical cooperation, especially in disaster response.
Talks are also progressing on marine scientific work, including ocean meteorology.
‘This is not about compromising sovereignty,’ Lazaro told BusinessMirror. ‘It’s about building mechanisms that might just prevent negative events.’
She defended the Department of Foreign Affairs’ approach, saying diplomacy is more than just protests. ‘People often say, ‘puro protest, puro protest,’ but diplomacy is more than that. It’s about keeping channels open,’ she said.