President Rodrigo Duterte invited Rosneft, a Russian giant firm for oil and gas exploration of the Philippine waters including the areas being claimed by China. Rosneft and other Russian companies already have oil and gas projects in territories disputed by Vietnam and China. Now, similar projects could be done in the Philippines as well.
A possible contract with the Department of Energy
Parts of the planned exploration are within the West Philippine Sea (South China Sea) which Beijing continues to claim through the so-called 9-dash line. It was in the year 2016 that the Permanent Court of Arbitration invalidated this claim.
Last October 2, Duterte went on his second official trip to Russia. Energy Secretary Alfonso Cusi told Rappler that the Philippine president gave the invitation through a courtesy call to Rosneft CEO Igor Sechin.
“PRRD (President Rodrigo Roa Duterte) extended invitation to Rosneft to do exploration in the Philippines,” Cusi said in a message to Rappler on Wednesday, October 9.
Rosneft was then asked for a service contract with the Department of Energy head by none other than Cusi himself.
“The 14 pre-determined areas are all within Philippine sovereign territory. We also mention the available areas at WPS (West Philippine Sea) which they can nominate to explore. Invitation of PRRD covers all,” said Cusi.
How important is the exploration?
The Department of Energy officials, as well as Duterte himself, already stressed out the urgency of finding other sources of energy for the Philippines. The government is concerned about the decline of the Malampaya gas project’s supply. The gas field in Palawan that supplied 40% of Luzon’s energy expected to last until the year 2024.
Also, the oil price in the world market is highly unpredictable and could hike in an unprecedented manner. With this, Duterte believes that having another natural source of energy is beneficial to the country.
Russia as an “exploration powerhouse”
Before the Rosneft courtesy call, Philippine Ambassador to Russia Carlos Sorreta said to the media that the Russian energy corporations are interested in oil and gas explorations in the Philippines.
Unlike China, Russia is not claiming any sovereign rights for the West Philippine Sea. So, a deal with Rosneft would not affect the Philippines’ territorial rights.
“They’re willing to do it within our laws. They’re not a claimant. If they come in, it’s really in full recognition of our sovereign rights and our right to explore,” said Sorreta.
He believes in the capacity of Russian oil firms to discover natural resources calling the country an “exploration powerhouse.”
“They’re in Africa, they’re in South America. They’re in Southeast Asia. They have the ability to drill under the most difficult – I mean explore under the most difficult circumstances like Siberia,” said the ambassador.
Duterte administration pursuing a memorandum of understanding with China
During China President Xi Jinping’s visit to the Philippines last November 2018, Malacañang released a copy of the memorandum of understanding for joint oil and gas exploration in the West Philippine Sea between the two countries.
The Malampaya gas field’s future supply problem is Duterte’s one reason for aggressively pursuing joint exploration with China.
Experts and critics have warned that such deal with Beijing would violate the constitutional provision that resources in the West Philippine Sea are for the exclusive use of Filipinos.
Up to now, a ban on exploration in the West Philippine Sea area remains due to the tension. However, the Duterte administration still pursued oil exploration with other countries and entities.
In October 2018, Duterte signed a contract for Israeli firm Ratio Petroleum Ltd for oil and gas exploration in a 416,000-hectare area east of Palawan.
Would Rosneft push a similar deal? If so, would the Duterte administration approve it?
Would China put pressure on Russia for exploring areas in the West Philippine Sea?