MANILA, Philippines — Philippine and Chinese officials signed last night a memorandum of

understanding (MOU) on joint oil and gas development in the West Philippine Sea.

The MOU was among 29 agreements signed by Manila and Beijing at the start of Chinese
President Xi Jinping’s two-day state visit in the Philippines.

Duterte and Xi witnessed the exchange of documents done by Foreign Affairs Secretary
Teodoro Locsin Jr. and Chinese Foreign Minister Wang Yi.

Senators earlier sought an inquiry into the proposed exploration of mineral resources between
the Philippines and China.

Unlike a memorandum of agreement, the MOU represents a lower level of commitment between
the concerned parties.

The joint exploration for oil and gas in the West Philippine Sea between the Philippines and
China would not affect sovereign rights and claims of the two countries over the disputed
waters, according to a draft framework agreement released by Sen. Antonio Trillanes IV
yesterday.

Based on the two-page draft China version of the agreement, the proposed joint exploration for
oil and gas would be in accordance with the principles of “mutual respect, fairness and mutual
benefit, flexibility and pragmatism and consensus through equal and friendly consultations.”

“The joint oil and gas exploration should not affect the respective position on sovereignty and
maritime rights and interests of the two parties,” Section V on “Relevant Position” of the draft
read.

The Philippines and China as well as Brunei, Malaysia, Taiwan and Vietnam are also claimants
to the South China Sea. China is claiming the entire region with its “nine-dash line assertion.”

China does not recognize the Philippines’ rights over Panatag (Scarborough) Shoal or the
Spratlys Islands.

The joint exploration, if it bears fruit, should pave the way for another cooperation agreement
on the exploitation of resources found, it said.

“Without prejudice to their respective positions, the two parties should, based on the outcome of
the joint exploration, make arrangements for the relevant bilateral cooperation including joint
exploration,” the draft read.

The supposed draft stated the outcome of the joint exploration would be shared only by the
Philippines and China.
 It cited the joint statements between the Philippines and China on Oct. 21, 2016 and on Nov.
16, 2017 as well as the MOU between the energy agencies of the two countries on May 15 last
year as the political basis for the agreement.

On dispute settlement, the proposed pact stated that “any dispute concerning the
implementation or interpretation of the agreement or any other relevant disputes should be
settled through friendly consultations by the two parties.”

The draft agreement stipulates the establishment of an inter-governmental joint steering

committee and an inter-entrepreneurial working group.

The committee would be led by the foreign affairs and energy departments of Philippines and
China as well as other relevant agencies.

The working group is proposed to consist of representatives from the China National Offshore
Oil Corp. (CNOOC) and an energy firm to be authorized by the Philippine government.

The working group will discuss details of the joint exploration, after which the CNOOC and the
designated Philippine energy company are to sign a contract based on these discussions.

The joint exploration contract will be executed upon ratification by the committee.

The Philippine National Oil Co. and Vietnam Oil and Gas Corp. signed the Joint Marine Seismic
Undertaking in 2005 to conduct a pre-exploration activity in the South China Sea to determine
the resource potentials of the disputed waters.

The drafted stated any document, information or data concerning the joint maritime oil and gas
exploration between the two parties should be kept confidential unless the two parties decide
otherwise.

Legal scrutiny
Malacañang expressed confidence that the proposed oil exploration deal between the
Philippines and China would stand court scrutiny.

“We assure the public that any agreement we will enter into with a foreign government or entity
would stand the judicial scrutiny of both countries and its constitutionality, if challenged, would
be upheld,” presidential spokesman Salvador Panelo said.

Senators Francis Pangilinan and Trillanes have filed Senate Resolution No. 943, which seeks a
congressional inquiry into the proposed deal between the Philippines and China involving
natural resources.

“We respect the Senate as an independent co-equal branch of government and welcome
whatever congressional or legislative action its members may want to undertake,” Panelo said.
 “In the same manner, we likewise expect respect from them by allowing us to do our job as we
perform activities, which are rightfully within the scope of executive faculty,” he said.

Pangilinan and Trillanes urged the Palace to release the “definitive draft” of the oil and gas
agreements with China or any other agreements involving Philippine natural resources.