Sunday, March 09, 2008

No sell-out in Spratly deal--energy execs

By Abigail L. Ho
Philippine Daily Inquirer
First Posted 14:21:00 03/08/2008

MANILA, Philippines -- Energy executives at the forefront of the Joint Marine Seismic Undertaking (JMSU) among the national oil firms of the Philippines, China and Vietnam have denied accusations the agreement effectively gave up the country's claim to the disputed Spratly islands in the South China Sea.

In a joint statement, former Energy Secretary Vincent Perez and former Philippine National Oil Co. president Eduardo MaƱalac said the JMSU had nothing to do with
politics, but was purely scientific in nature.

”The JMSU explicitly stated that the signing of the commercial agreement shall not undermine the position held by the Philippine government over the South China Sea. The agreement is designed to be scientific in nature and does not affect any territorial claims of the Philippine government,'' the statement said.

The Philippines and China forged a three-year agreement in 2004 to conduct a seismic study of an area spanning 142,886 square kilometers in the South China Sea, including the disputed Spratlys. When Vietnam, another Spratly claimant, objected, it became part of the tripartite JMSU, which is now being assailed as a "sellout" of the Philippines.
Some lawmakers said the agreement could have been in exchange for at least $8 billion in loans from China for, among others, the NorthRail and SouthRail projects and the National Broadband Network (NBN) deal.

But the energy executives said the agreement only entails seismic acquisition, processing and interpretation, and does not include any form of actual exploration.

Depending on the results of the seismic data processing and interpretation, PNOC Exploration Corp. (PNOC-EC), China National Offshore Oil Co. (CNOOC) and
Vietnam Oil and Gas Corp. (PetroVietnam) could decide to negotiate other agreements going beyond just data gathering.

”The JMSU is a commercial agreement between three national oil companies to jointly acquire seismic data. No exploration, drilling, and production activities were covered by the agreement. The JMSU is simply a data gathering effort among the three oil
companies,'' the joint statement said.

”The JMSU is not a treaty. If at the end of the three-year term of the JMSU no new definitive agreements are agreed on, then the JMSU expires by June 2008,'' it added.

The two former government energy officials said the JMSU was forged for no other reason than to enable energy independence and ensure energy security both in the country and in the region.

The JMSU, their joint statement said, was actually part of the government's five-point energy independence agenda launched in 2004, amid escalating oil prices and the country's high dependence on imported petroleum.

Under the five-point agenda, the government aimed to develop indigenous petroleum resources, promote renewable power, increase use of alternative fuels, form regional strategic alliances and strengthen energy conversation programs.

”The JMSU was part of our five-point energy independence agenda, to find and develop new indigenous petroleum reserves,'' the statement said.

”The JMSU was supported by the Philippine government to promote regional energy security. It hoped to contribute to the transformation of the South China Sea into an area of peace, cooperation and development. It was part of a strategic alliance to promote regional energy security, to lessen the region's dependence on Middle East oil,'' it added.

The agreement, the statement said, was likewise within the bounds of the Constitution and did not compromise the country's position regarding its claims on the disputed Spratlys.

Much care was taken to ensure that the government's claims would be protected, it added.

”PNOC was extremely careful and consistent in ensuring the constitutionality of the JMSU. PNOC closely coordinated with concerned agencies such as the (Department of Energy, Department of Foreign Affairs and Department of Justice) to ensure complete
staff work,'' it said.

The statement did not say why the agreement has not been publicly announced nor the full text released to the public.

The reported oil-rich Spratlys are being claimed in whole or in part by the Philippines, China, Vietnam, Brunei, Malaysia, and Taiwan.