Posts Tagged ‘gas’

Pakistan, UAE finalise $6.2bn support package

January 5, 2019
UAE Crown Prince Sheikh Mohammed bin Zayed Al Nahyan would be paying a two-day visit. — File photo
UAE Crown Prince Sheikh Mohammed bin Zayed Al Nahyan would be paying a two-day visit. — File photo

He said the UAE’s package was exactly of the same size and terms and conditions as given by Saudi Arabia. The UAE package was finalised on Thursday evening, he said.

With this, Pakistan would get a total saving of about $7.9bn on oil and gas imports from the two friendly countries — accounting for more than 60 per cent of annual oil import bill of about $12-13bn, he said. This includes about $3.2bn each of oil supplies on deferred payments from the UAE and Saudi Arabia and about $1.5bn trade finance from the International Islamic Trade Finance Corporation (ITFC).

The total financing support from the UAE and Saudi Arabia, including the ITFC’s trade finance, would be around $13.9-14bn when cash deposits of $3bn each from the two countries were also included, he said.

This is in addition to a deep-conversion oil refinery to be set up by Parco — a joint venture of Pakistan and Abdu Dhabi — worth $5-6bn at Khalifa Point and an expected petro-chemical complex by Saudi Arabia at Gwadar Oil City.

On top of that, the government has also started backchannel discussions with Qatar for some relief in terms of reduction in LNG prices or a relaxed payment schedule, but that is now at an early stage.

In reply to a question, the cabinet member said Pak­istan was deepening relationships with all three friendly Islamic nations without compromising bilateral ties for geo-political reasons.

He said the UAE crown prince would be paying a two-day visit, adding that all arrangements had been finalised in this regard.

He said Saudi Crown Prince Mohammad bin Salman was expected to arrive in the country in the first week of February and an MoU for establishing a petro-chemical complex was still being worked out on the request of Riyadh.

Pakistan has already received $2bn in cash deposit from Saudi Arabia at an interest rate of 3.18pc while the third tranche of $1bn is due in the first week of February. The Saudi oil facility would also start rolling out this month with an average $274 million per month.

Pakistan is currently importing about eight cargoes of LNG every month, costing $4.2 to $4.5bn a year and more than one-third of this could be financed through ITCF support. With support from Qatar, Pakistan is expecting about $9bn cushion in total oil and gas import bill.

Published in Dawn, January 5th, 2019


Pakistan: Cost of coal, firewood and LPG rises as people look for alternatives to gas

December 31, 2018

With most people living in the city relying on alternate fuel sources due to low natural gas pressure, dealers of Liquified Petroleum Gas (LPG), coal and wood have raised their prices to cash in on the situation.

LPG costs Rs160 per kilogram, but most stores are charging Rs180. Coal, which was previously being sold at Rs70 per kg, is now being sold for Rs90 and the price of wood has risen from Rs120 to Rs160 per kg.

The rise in prices of alternate fuel sources has also led to an increase in charges for catering services and at tandoors.

Residents have turned to other fuel sources amid low natural gas pressure in Rawalpindi

Mohammad Qamar, the owner of a catering service in Landa Bazaar near Committee Chowk, said they used to cook on gas stoves but the low gas pressure forced them to turn to wood, as LPG cylinders cannot be used to cook food in large pots and pans.

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“We are left with no choice but to increase our charges, as we cook food for weddings using firewood,” he said.

Dhoke Ratta resident Nasir Mir said they had been facing low gas pressure for the last month, and gas had not been available in the locality for the last week.

The government has failed to resolve this issue, he said. “In the last tenure of the PML-N government, a main line was laid for Rawalpindi city last year to overcome the low pressure but the new government has failed to connect it to local residential areas,” he said.

Asif Akbar, the vice chairman of Khayaban-i-Sir Syed, said people have been facing a gas shortage for the last month while the government looks the other way. He said elderly people and children in particular are suffering.

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Pakistani cooking breakfast and tea with coal at Mandi Karachi cattlemarket

“Due to the freezing weather, most people in the area suffer from seasonal diseases as they have no gas to warm their homes. LPG dealers will cylinders with substandard gas and black smoke is emitted from stoves, so people use coal and wood,” he added.

The price ofrotisold by tandoors has also increased, Mohammad Faisal from Dhoke Khabba said. “The price ofrotiis Rs8, but the tandoorwalas sell it for Rs10 claiming that they are preparing the bread on LPG cyliners,” he said.

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The low gas pressure has affected routine life badly, Mr Faisal said, adding that people are spending their weekly holidays collecting alternate fuel sources and are eating cold meals.

A senior Sui Northern Gas Pipelines (SNGPL) official toldDawnthe company did not increase gas pressure as the main line was damaged at various points on Murree Road and I.J. Principal Road.

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“If the pressure is increased, natural gas will be wasted through the leaking points. The SNGPL is currently buying gas from the fields and providing it to consumers, and gas leaks will put an extra burden on the company,” he said.

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At a meeting with MNAs and MPAs from Rawalpindi division on Saturday, Minister for Petroleum and Natural Resources Ghulam Sarwar Khan said the low gas pressure would be resolved on the basis of priority in Rawalpindi.

The meeting at Punjab House was also attended by officers from the SNGPL, including Rawalpindi General Manager Zahoor Mohammad who said gas will be provided to all Rawalpindi areas.

Published in Dawn, December 31st, 2018

See also:

Renewable energy for Pakistan:

Jaan Pakistan: ‘It’s not just about cooking stoves’

Saudi Arabia to Target U.S. With Sharp Oil Export Cut, Sources Say

December 13, 2018

After flooding the U.S. market in recent months, Saudi Arabia plans to slash exports to the world’s largest oil market in the coming weeks in an effort to dampen visible build-ups in crude inventories.

American-based oil refiners have been told to expect much lower shipments from the kingdom in January than in recent months following the OPEC agreement to reduce production, according to people briefed on the plans of state oil company Saudi Aramco.

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Saudi crude shipments to the U.S. next month could even test the 30-year low set in late 2017 of 582,000 barrels a day, down about 40 percent from the most recent three-month average, the same people said, asking not to be named as the information isn’t public. The final figure could still change, they added.

By shifting the focus of Saudi export reductions toward the U.S., Riyadh hopes to show to the market it’s making good on its promise to cut supplies. Fluctuations in U.S. crude imports and stockpiles have an outsize impact on the market because data are available on a weekly basis. In other regions, oil traders only get official figures on a monthly basis, or not at all in the case of stockpiles in big consumers such as China and India.

The Saudi energy ministry didn’t respond to a request for comment.

While the plan to slash Saudi exports to America may ultimately convince a skeptical oil market about the kingdom’s resolution to bring supply and demand in line, it may anger U.S. President Donald Trump, who has used social media to ask the Saudis and OPEC to keep the taps open.

Donald J. Trump


Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!

31.9K people are talking about this

Saudi total exports are set to drop to around 7 million barrels a day in January, down from about 8 million barrels a day in November-December, one of the people said. Khalid Al-Falih, the kingdom’s energy minister, told reporters last week that Saudi production will drop in January to 10.2 million barrels a day, down from 11.1 million barrels a day in November.

The oil market has so far largely ignored the production cuts that OPEC and its allies announced in early December, a larger-than-expected 1.2 million barrels a day — or just over 1 percent of global demand. Despite the OPEC+ curbs, benchmark Brent crude has hovered near $60 a barrel. Futures in London jumped 2.2 percent Thursday on the prospect of lower Saudi shipments to the U.S., closing at $61.45. Prices are still down 7.7 percent for the year.

The export curbs, if fully implemented, will affect big U.S. refiners such as Valero Energy Corp., Phillips 66, Chevron Corp., Exxon Mobil Corp., and Marathon Petroleum Corp. forcing them to buy similar crude elsewhere, such as Mexico, Canada or Venezuela. They could also hit Motiva Enterprises LLC, the Saudi-owned company that operates the largest refinery in the U.S.

Saudi Arabia has shipped 860,000 barrels a day of crude to the U.S. on average so far this year, according to Bloomberg calculations based on weekly customs data. Saudi exports into America had run even higher in the second half of the year, with July-to-December shipments rising to an average of 975,000 barrels a day, according to Bloomberg calculations.

Inventories Scrutinized

Oil trader Andy Hall, who earned the nickname “God” for his prescient calls on pricing before closing his hedge fund after suffering losses last year, says the oil market is heavily influenced by data like the weekly U.S. stockpile figures.

“People look at these things, scrutinize them,” he said of the data on Bloomberg Television Thursday. “The fact is, they only cover the U.S., which is 25 percent of the world oil market. The data available for inventories elsewhere in the world is poor at best.”

Hall now serves on the advisory board of Orbital Insight, a Palo Alto-based provider of analytic platforms to translate satellite and aerial images into useful data, including global oil supplies.

Russia Flexes Muscles as Natural Gas Industry Booms

November 26, 2018

MOSCOW—Russia is expanding its foothold in the fast-growing natural gas market despite Western efforts to limit Moscow’s energy influence.

Directly squaring off against U.S. shale exporters, Russia has emerged this year as a major player in the burgeoning market for liquefied natural gas, which is exported across the oceans on special ships. Meanwhile, Russia has been pumping gas into Europe at a record pace in existing pipelines, and to the East it’s close to opening a major pipeline into China, the world’s fastest-growing major gas market.

Natural gas, a vital energy source for homes, factories and power plants, is the world’s fastest-growing fossil fuel. Supplying it to the West, and increasingly to Asian powers like China and India, gives Russia hard cash and a seat at the geopolitical table.

“Our main goal is to preserve our current markets, primarily Europe, and to gain a foothold in new ones, especially Asia,” said Alexey Teksler, Russia’s first deputy Minister of Energy in an interview at his Moscow office. A giant map of Russia’s gas connections to Europe and Asia covered one wall.

Washington has been looking to curb Russia’s expansion, pressuring Berlin to halt construction of Nord Stream 2, a major gas pipeline connecting Germany with Russia. The U.S. has used trade negotiations to squeeze promises from the European Union and Asian countries to buy more U.S. gas.

But so far, only a handful of U.S. gas cargoes have reached European shores. In an investor presentation earlier this year, Russian state-owned energy giant Gazprom illustrated U.S. gas exports into Europe as a few drops of water beside a steaming teacup that depicted Russian exports.

In June, India received its first shipment of Russian LNG under a $25 billion contract, having previously imported U.S. gas.

China recently imposed tariffs on U.S. LNG, which could also provide an opening for Russia to supply it with more gas.

“They’ve ramped up their efforts. It looks like Russia’s ambitions are being realized bit by bit,” Tim Boersma, a researcher at Columbia University’s Center on Global Energy Policy.

Oil and gas brings in around 40% of Russia’s budget revenues, and a good chunk of that comes from the country’s 35% share of the European gas market.

Two years ago, when the first cargoes of U.S. LNG left a Louisiana terminal for Europe, European politicians predicted that this dominance was set to end in a wave of new gas from American shale fields, as well as from Qatar, the world’s largest gas producer.

Around the same time the EU imposed regulations on Moscow’s gas infrastructure. It later settled an antitrust case against Gazprom, Russia’s biggest gas exporter, that clinched promises of cheaper and freer natural-gas flows.

Russia has quickly adapted to the restrictions and new competition. It’s increasingly moving to auctions, where gas is offered to the highest bidder, and away from its traditional model of locking customers into long-term contracts linked to oil prices. That has given its customers more flexibility and lowered their prices.

“Russia is ready for fair competition,” said. Mr. Teksler, the Ministry of Energy official.

Gazprom’s average selling price fell by almost 50% since 2013, according to the company’s annual reports. That compares with a 20% fall in U.S. Henry Hub benchmark prices over the same period.

The company’s share price has risen by almost 20% over the past year while Russia’s RTS stock index has been broadly flat.

The country has also invested heavily in its gas industry, including Gazprom’s $55 billion 3,000 km-long Power of Siberia pipeline to China. It’s due to begin operations in December 2019, passing through some of the world’s most inhospitable terrain, where temperatures fall to as low as minus 62 degrees Celsius.

Last year, Russian President Vladimir Putin launched the Yamal LNG facility, which will deliver gas from an icy Arctic peninsula to the Asian market. Russia is also working on connecting its major gas developments on the Pacific Island of Sakhalin with China via a pipeline.

“China will be the main source of energy growth in the next 20-25 years” Pavel Sorokin, another Minister of Energy official, said in an interview. “This puts us in the same position as with Europe—whoever can offer the most competitive price, gets the market share.”

Price has been Russia’s competitive advantage. The June delivery to India, the first under a 20-year deal, was priced at around $7 per million British thermal units, around $1 to $1.50 cheaper than comparable deliveries from Qatar or the U.S., analysts say.

The Gazprom price “is very competitive,” Indian oil minister Dharmendra Pradhan told Indian media in June as he watched the giant tanker LNG Kano dock in the West Indian port of Dahej.

The industry in Russia has its own challenges. There are currently about six LNG projects in development or on the drawing board in Europe, most of them in countries that are in Russia’s former sphere of influence, that can turn to gas shipments from the U.S. and Qatar, analysts say.

Write to Georgi Kantchev at



South China Sea: For China, enormous tasks and uncertainties lie ahead — ASEAN nations have serious doubts

November 24, 2018

China and the Association of Southeast Asian Nations have been on a roll since late last year in their efforts to promote peace and stability in the South China Sea.

By Collin Koh
South China Morning Post

They promulgated the draft framework on the proposed code of conduct and adopted a single draft negotiating text for the code in August.

These developments attracted a mixture of reactions – from the most sceptical to the most upbeat about future progress in finalising the mechanism.

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Anti-China protests in the Philippines during Xi Jinping’s visit, Nov. 20, 2018, Philippine Star photo

However, it would appear that those who expected the code of conduct talks to ride to a swift realisation on the momentum built up by the draft framework and single draft negotiating text might be sorely disappointed.

While some Asean policy elites had indicated that the code might materialise as fast as within the next year, Chinese Premier Li Keqiang may have poured cold water on it with his remarks that the code could take three years to finalise.

Unsurprisingly, at the recent regional summit in Singapore, both Asean and China nevertheless expressed their common desire to finalise discussions on the code.

Never mind the most optimistic predictions or otherwise; it is important to highlight that inasmuch as one would want to see the code expeditiously agreed upon and operationalised, rushing the code does not appear to be the wisest thing to do.

Considerably enormous tasks and uncertainties lie ahead even after the single draft negotiating text was adopted by the 11 parties.

Xi Jinping, Rodrigo Duterte

If one bothers to look back at the history of multilateral arms control negotiations it is not difficult to identify the intricate set of challenges all parties face in the process of agreeing to such a treaty. The code is by all intents and purposes an arms control mechanism, albeit not the classical type which endeavours to limit the quantity and quality of armaments.

Rather, it would be akin to what arms control theorists call “operational arms control”, which, unlike structural arms control, seeks to limit not armaments per se but the way they are being employed. While these concepts might appear to be archaic cold war ideals, even today so-called confidence and security-building measures (CSBM) – such as the code under negotiation – aspire to accomplish precisely the same aims, which is to promote transparency and necessary constraints upon state parties’ behaviour in the context of interstate rivalry.

And the challenges faced in the past are nowhere different from today’s CSBM. Progress, longevity and eventual outcomes in the negotiations are highly dependent on the state parties’ national interests. The more parties are involved, the more potential spoilers in the works of the negotiating process since a multitude of national interests, which may conflict with each other, have to be taken on board with the hope that those at the discussion table can reach a consensus. This entire process can take a long time, reaping uncertain returns both good and bad.

Filipinos protest in Makati against the visit of Chinese President Xi Jinping. Photo: AP

And history is replete also with arms control treaties that died in the process of negotiations because parties could not come to terms with each other, or, even after pacts were signed, implementation became problematic because violations by any party could not be satisfactorily redressed through proper provisions for compliance, verification and enforcement.

It is therefore through the lens of heeding the history of arms control negotiations that one tampers with expectations about the code of conduct for the South China Sea, an unprecedented mechanism of this scale and ambition in a region that has traditionally not been well socialised with formal, institutionalised CSBM – or operational arms control mechanisms.

There are 11 parties, each having its own varying national interests with respect to not only the South China Sea disputes but more broadly their relations with each other and with external stakeholders. There is not plausibly going to be a common Asean stance with respect to the code of conduct precisely because of this.

Hence, one should not expect the talks to be dealt with on a bloc-versus-China basis. The diversity of interests among 11 parties is real and needs to be taken into full account. This also means an inherent uncertainty that will fraught the process.

As such, it might actually not be a bad thing if the talks require more than a year, going up to three perhaps as suggested by the Chinese premier, or even longer if the aim is to promulgate an effective code – one that transpires from a collective recognition of the challenges and a collective desire to overcome them.

Of course, the caveat for accommodating the idea of a longer process is that all parties have to engage in it in good faith. And that is most likely what makes or breaks the whole process.

Even as talks continue, some if not all claimants in the South China Sea continue to spruce up their physical hold over the occupied features within the disputed waters.

Call that militarisation or anything else – the truth of the matter is that such moves, despite efforts to sugar-coat them as “defensive” measures, do not lend to the promotion of mutual confidence among parties engaged in the code of conduct talks.

Yet from the realistic standpoint, until all concerned parties – which probably have to include even external stakeholders not party to the talks – can derive a consensus on what “militarisation” means and the activities it encompasses, having a moratorium on build-up and associated activities in the South China Sea seems a tall order.

So perhaps, if all parties are either going to exercise limited self-restraint or none at all in carrying out their activities in the sea, business as usual, then the very least that parties should do to maintain a cordial atmosphere for the talks to go on is to refrain from untoward incidents between forces operating in the area.

Asean and China have only one chance to succeed. But the one who stands to lose most from a failed or ineffectually implemented code would be Asean.

It would lose its credibility if the code of conduct either failed to materialise as talks collapsed, or is poked with numerous holes by recalcitrant violations after its promulgation.

Yet China would under all conceivable scenarios remain in a physically advantageous position in the sea: those militarised artificial islands are still there regardless of whether the talks succeed or otherwise.

The alternative, of course, will be to keep the process as an ongoing iteration of continuous talks – nothing more but talks, verbal promises, rhetorical expression of the desire for this code to eventually materialise through the boilerplate political declarations customarily issued by Asean and China. One may criticise the merits of this. But at least in the face of an intractable situation where the multiple parties at the negotiating table could not reconcile their differences, the appearance of an ongoing process may still give Asean some saving grace.

Collin Koh is research fellow with the Maritime Security Programme at the S. Rajaratnam School of International Studies, based in Nanyang Technological University, Singapore.

Dominant China pushes for oil and gas deals in Asia

November 23, 2018

Joint exploration with Brunei and Philippines could help strengthen China’s maritime claims

China’s President Xi Jinping (R) and Philippines’ President Rodrigo Duterte inspect the honour guard during a welcoming ceremony at the Malacanang palace grounds in Manila on November 20, 2018. Chinese President Xi Jinping called his visit on November 20 to long-time US ally the Philippines a “milestone”, as he aimed to boost blossoming ties on the promise of billions of dollars in backing for mega-projects.

AFP/Ted Aljibe

By John Reed in Bangkok and Lucy Hornby in Beijing

China is holding out the prospect of joint oil and gas development in disputed areas of the South China Sea as an inducement to its politically weaker south-east Asian neighbours, as it seeks to close off the waters to outsiders. Beijing has until now used its internationally unrecognised “Nine-Dash Line” claim to exercise a de facto veto on other countries’ attempts to exploit the rich mineral reserves within the disputed waters.

However, in visits to Brunei and the Philippines this week, Chinese President Xi Jinping presided over the signing of memoranda of understanding for joint oil and gas exploration and development with the two countries, promising to share the costs.

Critics in the region were quick to condemn China’s offer on energy, a core economic issue at the heart of the multiple territorial disputes in the region. They warned it risked creating new legal facts on the ground as tangible and permanent as the artificial islands and airstrips China is building in the sea.

“Signing the Chinese draft will make the Philippines recognise an unlawful ‘co-ownership’ with China of the West Philippine Sea,” two political opponents of the pro-Beijing President Rodrigo Duterte said in a resolution opposing the MoU as unconstitutional, and pressing the government to release a draft.  Journalists also pressed the government to release the full text of the MoU.

Teodoro “Teddyboy” Locsin, the country’s foreign minister, demurred, saying that he would need China’s permission to release the full document. Brunei, an oil-rich sultanate that holds claim to many of the most promising portions of the sea, has also not released its MoU.

China, Philippines deepen ties in South China Sea

Mr Locsin described the Sino-Philippine MoU as “an agreement to agree”. He confirmed that the two governments would establish an inter-governmental steering committee and one or more “inter-entrepreneurial working groups” meant to pave the way for future joint exploration.

Industry specialists said that while joint exploration — much less drilling for oil and gas in partnership with Beijing — were still a distant prospect, the fact that the MoU was signed at all was a victory for Beijing.

“The MoU is politically significant,” said Eufracia Taylor, managing consultant for Asia-Pacific with Verisk Maplecroft, a risk consultancy. “It stands as a win for Beijing in particular, which has successfully pushed its neighbour to prioritise exploration within its own exclusive economic zone on China’s terms.”

The Philippines needs the sea’s oil and gas more than China does. The country’s main gas deposit at Malampaya, off Palawan island, is due to run out of reserves by 2030, while Manila has been unable to explore a promising region in the South China Sea known as the Reed Bank because of Chinese pressure.

Underscoring the country’s weakness vis-à-vis China, Mr Duterte’s spokesman Salvador Panelo said that while a 2016 arbitration agreement recognised Manila’s claim over the EEZ, it was powerless to enforce it alone.

“There must be a collective action by the countries of the world either to persuade or pressure China into respecting [the arbitration] decision,” Mr Panelo said at a briefing before Mr Xi’s red-carpet welcome to the Malacañang Palace.  The agreements signed this week will have been watched elsewhere in the region, including Vietnam.

Hanoi has been more strident than most of its neighbours in rejecting China’s maritime claim, but is also struggling to get its offshore oil and gas plans in gear. Vietnam, under pressure from China, has since 2017 suspended two projects involving Repsol, the Spanish producer. Russia’s Rosneft in May began drilling on a gasfield in another part of the sea, but this brought a public reprimand from China’s foreign ministry.

Recommended Asia maritime tensions China and Philippines sign offshore oil and gas deal Mr Xi’s signing of the MoUs with the Philippines and Brunei came after Mr Xi’s stop in Papua New Guinea for the Asia-Pacific Economic Cooperation Forum, where US-China rivalry and Beijing’s designs on the sea were on display.

China and the US are pushing south-east Asia to endorse very different visions of a “code of conduct” in the South China Sea. In its draft, China included wording that would exclude any country bordering the sea from undertaking joint military exercises with countries from outside the region, or from granting companies outside the region undersea mineral rights, without the approval of others.

Chinese Premier Li Keqiang said last week in Singapore that China hoped to conclude the code within three years.

Additional reporting by Stefania Palma in Singapore

Questions Remain on Philippines-China Oil and Gas Agreement

November 23, 2018

The camp of Sen. Antonio Trillanes IV released a supposed two-page Chinese draft of a framework agreement on oil and gas exploration a day before Chinese President Xi Jinping landed in Manila for a state visit.

Following a bilateral meeting between the Philippines and China, Foreign Affairs Secertary Teodoro Locsin Jr. and Chinese Foreign Minister Wang Yi signed a memorandum of understanding on oil and gas development.

In this October 29 photo, Chinese State Councilor and Foreign Minister Wang Yi and Foreign Affairs Secretary Teodoro Locsin Jr. jointly meets the press after their talks in Davao. Wang and Locsin are the signatories of the memorandum of understanding on oil and gas development between the Philippines and China.


While Locsin said he will seek permission from China first before releasing a copy of the MOU to the public, CNN Philippines was able to obtain a copy of the three-page document

Amid Locsin’s claims that the Trillanes-released draft was not the one agreed upon by both parties, the two documents have some similarities.


The two documents have different titles, with an emphasis on the difference in exploration and development. The supposed Chinese draft was labeled “Framework Agreement on Joint Maritime Oil and Gas Exploration between China and the Philippines.”

The MOU that was signed was titled “Memorandum of Understanding on Cooperation on Oil and Gas Development between the Government of the Republic of the Philippines and Government of the People’s Republic of China.”


The final agreement indicated the context of the deal, recalling the United Nations charter, the 1982 UN Convention on the Law of the Sea and the 2002 Declaration on the Conduct of Parties in the South China Sea.

The MOU, which Locsin said he drafted himself, acknowledged that “through positive dialogue and practical cooperation,” the Philippines and China “have made substantial progress and meaningful gains in exploring opportunities and means to cooperate with each other in maritime activities, which has made significant contributions to peace, stability and development in the region.”

This part was not included in the supposed Chinese draft that came from the Trillanes camp.

Basic principle

Both documents indicated that the agreement would be in accordance with the principles of “mutual respect, fairness and mutual benefit, flexibility and pragmatism and consensus.”

The difference on this part is that the final MOU indicated that both countries have “decided to negotiate” on oil and gas exploration while the Trillanes copy said that both parties have “agreed to conduct joint oil and gas exploration” in the South China Sea, part of which is the West Philippine Sea.

Working mechanism

Both copies indicated that an inter-governmental joint steering committee and an inter-enterpreneurial working group will be established and will be led by ministries of foreign affairs, as well as energy departments.

The supposed Chinese draft identified China National Offshore Oil Corporation as the Chinese enterporse for each working group, which is the same with the final MOU.

The final document, however, has designated the Philippine National Oil Company — Exploration Corporation as the Philippine enterprise.

The MOU was also specific on the timeline of the agreement, stating that the “two governments will endeavour to agree on the cooperation arrangements within 12 months.”

The Trillanes-released draft included a separate “outcome sharing” section, which specified that “the outcome shall only be shared by two parties.” There was no mention of this in the agreement that was recently signed.

Relevant position

The Locsin-drafted agreement specified that all discusssions, negotiations and activities of the Philippine and Chinese governments under the MOU “will be without prejudice to the respective legal positions of both governments.”

The Trillanes-released supposed Chinese draft used the phrase “shall not affect the respective position on sovereignty and maritime rights and interests of the two parties.”

The final MOU also had an additional sentence which said, “This Memorandum of Understanding does not create rights or obligations under international or domestic law.”

Nature of information

Both copies directed that any information between the two parties would be kept confidential.

The Trillanes-released draft added an additional section on dispute settlement, which stated that any dispute on the implementation of the agreement “shall be settled through friendly consultation by the two parties.

This was not included in the final deal but the Locsin-released document declared on its “other matters” section that any other matters relating to the MOU would referred jointly by both parties to the committee or a working group “for consultation and agreement.”


Has Philippine President Duterte ‘surrendered’ to China needlessly on the South China Sea? — Is the Philippines a Chinese puppet?

November 21, 2018

President Xi Jinping has signed 29 bilateral deals with the Philippines on his landmark visit to Manila. But experts say his main agenda was to forge cooperation on the disputed South China Sea. Ana P. Santos reports.

Manila potests against China-funded Kaliwa Dam (Getty Images/AFP/T. Aljibe)

Chinese President Xi Jinping concluded a two-day visit to the Philippines on Wednesday after signing 29 bilateral agreements, including a memorandum of understanding with Manila on oil and gas development in the South China Sea (SCS).

Read more: South China Sea – what you need to know

Xi and Philippine President Rodrigo Duterte also discussed matters related to defense, security, maritime cooperation, law enforcement, and transnational crime.

Xi’s Philippines visit was the first by a Chinese president in 13 years and is seen as an effort to cement newly improved relations between the two countries that have been locked in bitter dispute over maritime claims in the SCS.

Alfonso Cusi, the Philippines’ energy secretary, hailed the bilateral deals as a “solution” to how the two countries could benefit from resources in the contested waters.

However, this new détente between China and the Philippines also has consequences on land. Indigenous Filipinos are protesting one of the deals, which allows China to build a dam on land occupied by indigenous people.

Deals shrouded in ‘secrecy’

On Wednesday, a group of protestors held a demonstration outside the Chinese Consulate in Manila, lambasting the Duterte administration’s “acquiescence” to China.

“President Duterte is giving the country away to China. I am disgusted and it makes me angry,” Max Soriano, a member of the Akbayan Citizens’ Action Party, told DW.

Jay Batongbacal, a maritime expert, said it was obvious that the purpose of Xi’s Manila visit was to convince the country’s authorities to allow energy exploration in the SCS.

Batongbacal, however, added that it is too early to say if the bilateral deals would result in a “debt trap” for the Philippines, as there aren’t enough details currently available on the agreements.

“I find it unusual that there are no details [about the signed deals] available to the public. We are left guessing. That is why the public needs to remain vigilant and keep demanding transparency from the government,” Batongbacal told DW.

The expert also said that it is likely that other agreements would be signed at a later date. If that happens, it would make it even harder to assess the impact of the deals, Batongbacal warned.

But Salvador Panelo, a spokesman for President Duterte, assured that “the government will release all pertinent information for public consumption once President Xi’s visit has culminated and as soon as the complete, proper and correct documents become certified and available.”

Infografik Karte South China Sea: Chinese claims and disputed islands

Territorial disputes

A territorial conflict over the SCS has strained relations between Manila and Beijing. The area is located in the western Pacific Ocean and is an important shipping route where an estimated $5 trillion worth of trade passes every year. There are also reportedly large deposits of oil and natural gas.

Tensions between the two countries escalated in 2012, when the Chinese Coast Guard barred Filipino fishermen from fishing in Scarborough Shoal, located off nearly 200 kilometers (120 miles) off the coast of Subic Bay.

Manila took the matter to the Hague-based Permanent Court of Arbitration, which ruled in favor of the Philippines, ruling that China had no basis for its sweeping territorial claims over the entirety of the SCS.

But unexpectedly, President Duterte refused to enforce the historic ruling, arguing that his country does not want to go to war with China.

Read more: Philippines’ Duterte scales back building work in South China Sea spat

Political analyst Ramon Casiple dubbed Xi’s visit “a success.” He criticized the hardline position of the previous government for straining ties between China and the Philippines. “It raised tensions in the area and did not benefit our people,” he told DW.

“The reality is that we shouldn’t fuel tensions. The Duterte administration realizes that the Philippines needs to negotiate with China. We should support this negotiation process because it is yielding results,” Casiple said.

A Chinese puppet?

But Jose Antonio Custodio, a security analyst, said that Manila is compromising on its interests by cozying up to Beijing.

“Duterte has compromised our sovereignty for the sake of his parochial interests,” Custodio told DW.

The analyst said that China’s interests go beyond the Philippines, as it is seeking a greater presence throughout the Pacific.

Last month, two politicians in New Zealand reportedly accepted campaign funds from a donor with ties to the Chinese Communist Party in exchange for adding two businessmen to a list of candidates for their country’s parliament.

“Duterte also thinks that with China as his political guarantor, he can remain in power,” said Custodio.

“The Duterte administration is already a Chinese puppet. The Philippines is now viewed by other countries as an obstacle to regional cooperation,” Custodio added.

Read more: Is the Philippines’ Duterte playing China against Japan?


Philippines Gets Taken By Crafty China Deal Making — South China Sea Surrendered — China failed to deliver on promised billions of dollars in aid and investment

November 21, 2018

Chinese leader’s highly anticipated visit fell short on several fronts, including on a previous pledge to provide as much as US$24 billion in official aid and private investment for mega-projects, raising questions about Beijing’s true commitment to the Southeast Asian nation.

Critics say Duterte has sold out Philippine national interests in the South China Sea and received little in return

Xi Jinping’s visit to the Philippines heralded a new ‘strategic partnership’ 

 MANILA, NOVEMBER 21, 2018 5:10 PM (UTC+8)

Chinese President Xi Jinping (L) gestures as Philippines' President Rodrigo Duterte (R) looks on during a state banquet at the Malacanang Presidential Palace in Manila on November 20, 2018. Photo" AFP/Mark R. Cristino/Pool

Chinese President Xi Jinping (L) gestures as Philippines’ President Rodrigo Duterte (R) looks on during a state banquet at the Malacanang Presidential Palace in Manila on November 20, 2018. Photo” AFP/Mark R. Cristino/Pool

Del Rosario calls for ‘full transparency’ in Philippine-China oil deal

November 21, 2018

‘It behooves our negotiators to ensure that our Constitution is not violated,’ former foreign secretary Albert del Rosario tells Rappler

 Former foreign secretary Albert del Rosario called on Filipinos to seek “full transparency” after the Philippines and China signed a memorandum of understanding (MOU) on oil and gas development in the West Philippine Sea.

Despite requests from reporters, Malacañang and the Department of Foreign Affairs have not released a copy of the MOU as of Wednesday morning, November 21. The MOU was signed Tuesday, November 20, during the historic state visit of Chinese President Xi Jinping to the Philippines.

FULL TRANSPARENCY. Former foreign secretary Albert del Rosario calls on Filipinos to seek 'full transparency' about possible oil and gas development in the West Philippine Sea. File photo by Angie de Silva/Rappler

FULL TRANSPARENCY. Former foreign secretary Albert del Rosario calls on Filipinos to seek ‘full transparency’ about possible oil and gas development in the West Philippine Sea. File photo by Angie de Silva/Rappler

“I have not seen what was signed, but I am told it is tantamount to an understanding to negotiate a possible cooperation for oil and gas development. I am not a lawyer but, if that is so, it would not be viewed as being objectionable,” Del Rosario told Rappler on Tuesday evening.

“In moving it forward with what has been signed, it behooves our negotiators to ensure that our Constitution is not violated and our tribunal outcome is not undermined,” he said.

The tribunal outcome is the Philippines’ victory against China in the case it filed in a Hague tribunal over the South China Sea, under Del Rosario’s watch as foreign secretary. Invalidating China’s expansive claim over these waters, the ruling upholds the Philippines’ rights over the West Philippine Sea.

China refuses to acknowledge this ruling while the Duterte administration has decided to shelve it. Former Philippine foreign secretary Alan Peter Cayetano said there is now an aggressive push for joint exploration of the West Philippine Sea between the two countries.

Referring to the possible cooperation for oil and gas development, Del Rosario added, “Moreover, our people should be seeking full transparency throughout the whole process.

JMSU part two?

Critics already fear that the joint exploration agreement is a repeat of a controversial agreement signed during the Arroyo administration.

The Joint Marine Seismic Undertaking (JMSU) was an agreement signed by the Philippines and China through their national oil corporations on September 1, 2004, to jointly explore the South China Sea for oil and natural gas.

Vietnam, a claimant country in the South China Sea, later complained about this Philippines-China deal, prompting the two parties to include Hanoi in a tripartite JMSU on March 14, 2005.

The JMSU lapsed on July 1, 2008, but a case on the JMSU’s constitutionality is pending at the Supreme Court.

In a Senate resolution on Monday, November 19, opposition senators Antonio Trillanes IV and Francis Pangilinan pointed out that a “non-transparent process” led to the signing of the JMSU in 2004.

The senators said this “should remind us to exercise extraordinary vigilance in any potential deal with China involving Philippine waters, the seabed, the subsoil, the insular shelves, other submarine areas, and their natural resources.”

The draft Senate resolution states that the executive branch should “release the definitive draft of the oil and gas agreement with China” before any such agreement is signed.

The opposition senators urged the executive branch “not to sign any agreement with China or any other State which diminishes the Philippines’ exclusive right under domestic and international law to explore, develop, and utilize its natural resources.” –