Philippines' Supreme Court Voids 2005 South China Sea Oil & Gas Exploration Deal

Karen Lema and Enrico dela Cruz
Tuesday, January 10, 2023

The Supreme Court in the Philippines on Tuesday declared the country's 2005 energy exploration agreement with Chinese and Vietnamese firms was illegal, ruling that the constitution does not allow foreign entities to exploit natural resources. 

The decision, on an agreement that expired in 2008, could complicate efforts by China to revive oil and gas exploration talks with the Philippines in areas of the South China Sea that are not in dispute. 

The court gave no explanation for why the ruling came 14 years after a petition was filed. China and the Philippines have sparred for decades over sovereignty and natural resources in the South China Sea, which led to a landmark arbitration case in 2016 won by Manila. 

Efforts to find a legally viable way to work together on energy exploration have repeatedly hit walls. 

The previous Philippine government in June last year abandoned the latest attempt, citing constitutional constraints and issues of sovereignty. 

Philippine President Ferdinand Marcos Jr, ahead of a visit to China last week, said his country must find a way to exploit its untapped energy reserves in its exclusive economic zone, even without China's expertise.

China claims jurisdiction over almost the entire South China Sea, and the risk of energy activities being disrupted has made it tricky for the Philippines to find foreign partners, despite an arbitration court clarifying what Manila's entitlements were.

Its Supreme Court on Tuesday voided what was a deal between state-run Philippines National Oil Company, China National Offshore Oil Corp and Vietnam Oil and Gas Corporation covering a 142,886 square kilometer (55,169 square mile) area of the sea. 

It ruled it was illegal because the constitution stipulates the Philippines state must control and supervise activities and companies involved must be majority Philippine-owned.

(Reuters - Reporting by Karen Lema and Enrico dela Cruz; Editing by Martin Petty)


Categories: Legal Energy Industry News Activity Asia South China Sea

Related Stories

Conrad, Empyrean Agree Settlement Framework Over Duyung PSC Interests

MODEC, Eld Energy Partnership Targets Low-Carbon FPSO Power

Chevron in Final Talks with Eneos, Glencore on Singapore Assets Sale

ADNOC Gas Signs $3B LNG Supply Deal with India’s HPCL

Philippines Makes First Offshore Gas Discovery in Over a Decade

Woodside to Supply LNG to JERA During Japan's Winter Peak

Vantris Energy Lands Petronas Job on Malaysia’s Offshore Fields

Petronas, CNOOC Ink LNG Sale and Purchase Agreement

Russia Gives ExxonMobil More Time to Exit Sakhalin-1 Oil and Gas Project

Yinson Production Cuts First Steel for Vietnam-Bound FSO

Current News

Conrad, Empyrean Agree Settlement Framework Over Duyung PSC Interests

Northern Offshore’s Energy Emerger Rig Up for Drilling Job off Oman

Petronas Plans Ramp-Up in Exploration, Production Over Three Years

Australia and Timor-Leste Push to Advance Greater Sunrise Gas Field

MODEC, Eld Energy Partnership Targets Low-Carbon FPSO Power

JERA Lifts First LNG Cargo From Barossa Gas Project in Australia

Inpex Moves to Accelerate Indonesia’s Abadi LNG Project

Chevron in Final Talks with Eneos, Glencore on Singapore Assets Sale

Seadrill Firms Up Offshore Drilling Workload with Multi-Region Contract Awards

Turkish Petroleum, Chevron Discuss Joint Oil and Gas Exploration

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com