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A formula for the Philippines, China, and Vietnam in the West Philippine Sea-South China Sea and other participants

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By Jose De Vencia Jr.

At some point now or sooner than later, the claimants in the South China Sea/West Philippine Sea will have to sit down and agree on a seismic and oil exploration program to be fol­lowed by a definitive oil drilling and development schedule for a satisfac­tory commercial petroleum discovery which is anticipated.

This should include a detailed and definitive agreement in the event of marginal hydrocarbon discoveries, non-commercial in volume, and must be followed through by a series of exploration activities in the areas with reasonable looking anticlines or likely oil-bearing structures before the areas are given up, or abandoned, or preserved for other uses by suc­ceeding generations.

The anticipated agreement should include sharing of explora­tion expense, the more expensive development costs in the event of commercial discovery, distribution of export petroleum to refineries in the Philippines, China, and Vietnam, and/or third-party international buy­ers, and an agreement on a second-round or third-round of exploration areas nearby or in much farther locations.

There is a need for a focussed Petroleum Academy or a unit in the Philippines to train future Filipino geologists, drilling technicians in hydro-carbons-related work who can be assigned at home or abroad for hydrocarbons employment.

The pe­troleum division can be an initial ex­tension or component of an expanded Base Metals Mining Division in our Department of Environment and Natural Resources (DENR).

It will be the workplace for Filipino students eyeing positions in petroleum or min­ing industries after graduation.

The Philippine government must now consider training an initial 100 scholars in petroleum and mining industries for future assignment af­ter graduation at home or overseas under veteran executives and who will mobilize successive waves of like-minded students.

This early, we should have ex­changes with Australian, US, Chi­nese, Japanese, Canadian, South Ko­rean, Malaysian, and Indonesian oil exploration and base metals mining organizations to help develop Philip­pine capabilities in these fields if we have not yet done so, or for perhaps only an inadequate few until now.

The government and existing capable Philippine companies must assist our eager students in these fields.

For all these expectations to come to pass, the Philippines or ASEAN, or just the concerned ASEAN countries, must now initiate work and call first for an initial meeting and get to work soon on valid proposals.

The first task is to undertake detailed extensive seismic surveys in the target offshore areas, to iden­tify the first exploratory drillable structures in the South China Sea (West Philippine Sea), approximate the costs of exploration for, say, an initial program of five wells (shallow or deep wells as needed), preferably using Chinese or US drillships, with common Filipino, Chinese, Viet­namese drilling representatives and crews onsite.

I must say that in the event of commercial oil discovery, the refin­ing will be done in Philippine or Chinese or Vietnamese refineries located relatively nearby through eventual interconnecting pipelines or immediate oil tankers parked in the vicinity.

Engaging American drillships from the Gulf of Mexico will be too expensive to hire or engage and bring them all the way to the South China Sea for drilling in the offshore areas near Palawan and further in Fujian or on to the Tonkin Gulf area of Vietnam.

I believe if we start talking quietly and professionally instead of shout­ing at each other in the wire news services, television, or radio, our ne­gotiations, aided by our professional petroleum executives and geologists, could agree on a Philippine-Chinese-Vietnamese initial five-wells explora­tion program with reasonable budget costs for an 18-month or two-year period, including adequate time for data analysis.

This will immediately mean two years of uninterrupted peace in the South China Sea.

So that nobody will be more equal than others irrespective of size, might, and contribution, the cost of exploration and development must be shared and divided equally among the three-nation partners.

And the three countries must agree among them­selves who will be the designated “op­erator” who will assume leadership and management responsibility for the drilling program under a Drilling Committee composed of the three na­tion partners who might engage other offshore international technicians for independent consultations.

The sharing system, unless one partner abdicates for any valid rea­son whatsoever, must continue to preserve the continuing efficacy of the partnership and of the system itself which could run for as long as a hundred years or more.

Sooner than later, Malaysia and Brunei should be invited to join the Philippines, China, and Vietnam strat­egraphic oil/gas drilling in other areas of the South China Sea.

An under­standing with China must be reached to deal with Taiwan’s role in the explo­ration/development program.

If this South China Sea oil explo­ration and, hopefully, oil development project can run for a long period, it is hoped that it will extend to

China and Japan in the disputed areas in the Senkaku or Diayou Straits in the East China Sea.

It can also be a formula for last­ing peace between China and India in their vast conflict areas in the high Himalayas, between India and Pakistan over Kashmir, and between Azerbaijan and Armenia over Na­gorno Karabakh, which will put Israel and Palestine to shame if they do not finally agree on their already much-delayed land-sharing agreement.

There are also other Philippine areas for possible oil discovery in the Sulu Sea below the Treaty Line across Sabah which has not yet been explored geologically until now.

The Muslim areas in Central Mindanao have also not yet been explored for petroleum resources, which are Filipino Muslim and Christian brothers need badly for development.

Right now, almost all of Northeast Asia, China, Japan, and South Korea, and in Southeast Asia, the Philip­pines, Cambodia, Thailand, Laos, and Singapore, must send their oil tankers across the South China Sea and into the Indian Ocean and the Arabian Sea and into the Straits of Hormuz to lift crude from the rich oilfields of Saudi Arabia, Kuwait, and the United Arab Emirates.

In our earlier humble capacity as president of the Petroleum As­sociation of the Philippines and later as speaker of the House, I had made similar earlier proposals in 1970 and 1987 to the same countries and I believe now is the most auspicious time for undertaking opportunities for exploration and development in the sea.

The alternatives for all of us are endless tension, conflict, and, God forbid, even war.

May God bless all the claimant nations and their leaders and all of us this Holy Week and beyond.

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