Pact forbids RP from extracting own gas

GOTCHA, Published in The Philippine Star Friday, March 7, 2008

The controversial pact with China to jointly explore the Spratly and Palawan seas is thwarting RP from profiting from its own oil-gas reserves. Invoking the one-sided deal, China has been vetoing RP efforts to mine offshore fields within territorial waters. So the Senate, constitutionally bound to ratify treaties, has been asked to review the 2004 signing and attendant secrecy.

A company that holds exploration rights off Palawan’s west coast is decrying government’s refusal to allow extraction of natural gas. Chinese resistance is to blame, it says. Meantime, RP is losing potential revenue shares from the gas field. Such shares could reach billions of dollars, comparing the size of the gas mine to Shell’s productive Malampaya well nearby.

Sen. Antonio Trillanes IV, calling the pact “treasonous” for ceding to China RP’s rights over its own natural resources, wants an investigation. Rep. Roilo Golez, once Arroyo’s national security adviser but now with the Opposition, also has called for a separate House inquiry.

Forum Energy has long been asking authorities for a service contract to mine four sites in a corner of the 10,640-sq km Reed Bank. The British firm already holds a June 2002 survey-exploration contract over the 248 sq km zone called Sampaguita Field. Sophisticated 3-D surveys show “reserves of 3.4 trillion cubic feet gas-in-place, with upside reaching 20 TCF” — bigger than Malampaya’s. But the Department of Energy is employing delaying tactics, its hands tied by the pact approved by Gloria Macapagal Arroyo in 2004.

China reportedly has been resisting a license grant to Forum, or any other fuel prospector in the Spratlys — or even Palawan. Sources say that, with the 2004 “Agreement for Joint Marine Seismic Undertaking in Certain Areas of the South China Sea,” China has deemed Palawan as its possession.

The agreement has been kept under wraps since its first signing in Beijing in Sept. 2004. Only recently have details leaked to research circles in the Association of Southeast Asian Nations. Under the pact, China and RP are to jointly explore 142,886 sq km of waters and ocean floors. It turns out, however, that the favored area is not limited to the Spratly Isles, over which China, RP, Vietnam, three other ASEAN lands, and Taiwan have conflicting claims. Even RP’s continental shelf, part of its legal territory under the UN Convention on the Law of the Sea, was thrown in. Arroyo has yet to explain herself.

In its Jan.-Feb. 2008 issue, Far Eastern Economic Review reported that the joint exploration was supposed to appease the Spratly claimants. But it turns out that the pact covers not only the disputed region but also Palawan waters that China et al never claimed. One-sixth of the joint-use zone is clearly RP territory, Barry Wain wrote. RP’s Constitution forbids foreign exploitation of natural resources, unless under stringent conditions.

The RP-China pact (later including Vietnam in Mar. 2005) imbues the signatories with exclusive exploration rights to the 142,886 sq km area. No party may assign the rights to sub-entities without written permission from the rest. By this virtue, China is denying RP’s right to permit private firms to extract oil and gas in Palawan waters beyond 2004.

RP was hoodwinked. But China thenceforth committed $2 billion a year in loans, from which RP officials may skim 20 percent ($400 million) in kickbacks.

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Reader Mark Mallari has something for government officials to chew on:

“Thank you for your efforts and sacrifices in exposing misdeeds in government, from the NBN-ZTE plunder to high treason in the Spratlys. In the light of these happenings, I offer a suggestion:

“We need legislation to guarantee transparency in all government dealings. Barack Obama points the way in his “Google for Government”; he proposes that all government transactions, contracts, bids, gifts to officials, pork barrel, etc. (except those with true national security implications) be posted on a special website within a specified number of days. “Google for Government” would allow media and ordinary citizens to look over the shoulders of public servants and make sure that the state treasury is well spent. Incredibly we still have no Freedom of Information Law. We should all be allowed, within reason, to request complete, unaltered copies of any government transaction, or view these in real time via the Internet. A lot of the problems we face today are because public servants feel there is a cloak of darkness protecting them from public scrutiny. If they know there’s a nightlight left on, the bar of integrity would be raised to a very high level. A system like this would be very expensive, but plunder can be more so for us victims.”

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E-mail: jariusbondoc@workmail.com