China backs joint energy development with Philippines in South China Sea, urges Asean to reject outside interference

China's Foreign Minister Wang Yi (left) shakes hands with Philippine Foreign Affairs secretary Alan Peter Cayetano after signing the guestbook in Manila on July 25, 2017.
China's Foreign Minister Wang Yi (left) shakes hands with Philippine Foreign Affairs secretary Alan Peter Cayetano after signing the guestbook in Manila on July 25, 2017.PHOTO: AFP

MANILA (REUTERS, AFP) - China's foreign minister on Tuesday (July 25) said he supported the idea of joint energy ventures with the Philippines in the disputed South China Sea, warning that unilateral action could cause problems and damage both sides.

Wang Yi also urged Asean nations to unite and “say no” to outside forces seeking to interfere in the South China Sea dispute, in an apparent swipe at the United States ahead of a regional summit.  

Wang made the statement in Manila where he hailed the “strong momentum” in improving ties with the Philippines, a longstanding American ally which has moved closer to China under President Rodrigo Duterte.  

Wang’s visit came a week before he was set to return to Manila for a meeting of foreign ministers from the 10-member Asean and its partners, which include China and the United States.  

Wang said warming relations between Beijing and Manila had helped ensure stability in the South China Sea, where rival claims have long made it one of Asia’s potential military flashpoints.

“If there are still some non-regional forces or forces in the region that don’t want to see stability in the South China Sea and they still want to stir up trouble in the South China Sea, we need to stand together and say no to them together,” Wang told reporters.  

China claims nearly all of the strategically vital sea, even waters approaching the coasts of its neighbours. Asean members the Philippines, Vietnam, Malaysia and Brunei, as well as Taiwan, claim parts of the sea.  

Beijing calls for halt to Vietnam drilling

China’s Foreign Ministry has urged a halt to oil drilling in a disputed part of the South China Sea, where Spanish oil company Repsol had been operating in cooperation with Vietnam.

Drilling began in mid-June in Vietnam’s Block 136/3, which is licenced to Vietnam’s state oil firm, Spain’s Repsol and Mubadala Development Co of the United Arab Emirates.

The block lies inside the U-shaped ‘nine-dash line’ that marks the vast area that China claims in the sea and overlaps what it says are its own oil concessions.
Foreign Ministry spokesman Lu Kang said China had indisputable sovereignty over the Spratly Islands, which China calls the Nansha islands, and jurisdiction over the relevant 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. He did not elaborate.

This week the BBC reported that Vietnam had halted drilling there after Chinese threats, but there was no independent confirmation and neither Vietnamese officials nor Repsol made any comment on the report.

DUTERTE DRAWS CLOSER TO CHINA

While the United States is not a claimant and says it takes no sides in the disputes, it has criticised what it has termed Chinese “militarisation” of the sea. Washington has repeatedly sent warships close to Chinese-occupied islands in the sea in recent years, triggering angry responses from Beijing.

In the latest confrontation, Chinese fighter jets intercepted a US Navy surveillance plane over the East China Sea at the weekend, according to US officials. 

Duterte, a self-described socialist, has loosened his nation’s 70-year-old alliance with the United States while looking to build stronger relations with China and Russia.  Duterte has downplayed the Philippines’ dispute with China, declining to use a favourable ruling from a UN-backed tribunal last year on the issue to pressure Beijing.

He said on Monday said a partner had been found to develop oil fields and exploration and exploitation would restart this year.

Duterte did not identify the partner. The energy ministry on July 12 said drilling at the Reed Bank, suspended in 2014, might resume before year-end, and the government was preparing to offer new blocks to investors in bidding in December.

"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," Wang, who was on a two-day visit to Manila, told a news conference.

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

The Philippines suspended energy activities while awaiting a ruling in a case by the Permanent Court of Arbitration in the Hague. When it ruled a year ago, the court invalidated China's claim to sovereignty over most of the South China Sea, through which more than US$5 trillion of seaborne goods passes each year.

Beijing's harassment of a survey ship of an Anglo-Filipino consortium in the Reed Bank in 2011 and its control of Scarborough Shoal in 2012 were among the reasons Manila filed the arbitration case, which China refuses to recognise.

The tribunal clarified Philippine sovereign rights to access offshore oil and gas its 200-mile Exclusive Economic Zone (EEZ), within which the Reed Bank is located.

The Philippines relies overwhelmingly on imports to fuel its fast-growing economy and needs to develop indigenous energy resources. Its main source of natural gas, the Malampaya field near the disputed waters, will be depleted within a decade.

Philippine Foreign Secretary Alan Peter Cayetano said the proposal to jointly develop resources in the disputed waters began in 1986, but the two countries "had not found wisdom to be able to push through to the next step".

Experts say setting up such an arrangement would be extremely complex and politically sensitive. Both countries claim the oil and gas reserves, and a deal on sharing could be seen as legitimising the other side's claim, or giving away sovereign territory.

Wang also said China and Asean countries were firming up a maritime code of conduct framework, showing the world they could handle differences.