China backs joint energy ventures with Philippines in South China Sea

China backs joint energy ventures with Philippines in South China Sea
Foreign Affairs Secretary Alan Peter Cayetano with China’s Foreign Minister Wang Yi today

China’s foreign minister has today (Tuesday, July 25) said he supports the idea of joint energy ventures with the Philippines in the disputed South China Sea.

He also warned that unilateral action would cause problems, while a foreign ministry spokesman ordered Spanish oil company Repsol to cease drilling in cooperation with Vietnam in the disputed waters.


Minister Wang Yi, on a two-day visit to Manila, made the remarks after President Duterte said yesterday that an unidentified partner had been found to develop oil fields.

As we reported earlier this month, the Philippine energy ministry said drilling at Reed Bank, suspended in 2014, could resume this year.

Speaking at today’s news conference, Mr Wang said: “In waters where there are overlapping maritime rights and interests, if one party goes for unilateral development, and the other party takes the same action, that might complicate the situation at sea.


“That might lead to tension and, as the end result, nobody would be able to develop resources.”

The Philippines suspended oil and gas exploration while waiting on a ruling by the Permanent Court of Arbitration in the Hague.

When it ruled in favour of the Philippines in July last year, it thereby rejected China’s unilateral claim to sovereignty over most of the strategically important and resource-rich waters.

China backs joint energy ventures with Philippines in South China Sea
The conflicting territorial claims in the South China Sea

The tribunal confirmed Philippine sovereign rights to access oil and gas with its 200-mile Exclusive Economic Zone, which includes Reed Bank.

Experts told Reuters that setting up such a joint venture would be politically sensitive — as it could be seen as legitimising the other side’s claim, or surrendering sovereign territory.

Meanwhile, Mr Wang made a veiled reference to the United States, when he said that “regional friends” should stand up to outside interference.

“If there are still some non-regional forces in the region, they don’t want to see stability and want to stir up trouble, we need to stand together and say ‘No’ to them together,” he said.

Also this week, China’s Foreign Ministry has urged a Spanish oil company and Vietnam to stop drilling in a another disputed part of the South China Sea.

Drilling began in mid-June in a block of the sea licensed to Vietnam’s state oil firm, Spain’s Repsol and Mubadala Development Company of the United Arab Emirates.

Foreign Ministry spokesman Lu Kang said China had “indisputable sovereignty” over the Spratly Islands, which China calls the Nansha islands, and jurisdiction over nearby waters and seabed.

“China urges the relevant party to cease the relevant unilateral infringing activities and with practical actions safeguard the hard-earned positive situation in the South China Sea,” Lu said at a regular briefing, when asked if China had pressured Vietnam or the Spanish company to stop drilling.