An ‘MOU to agree to arrive at an agreement’

Joint briefing by Philippine Foreign Secretary Teodoro Locsin, Jr and Chinese Foreign Minister Wang Yi. Screengrab from ANC.

I love it that Foreign Secretary Teddy Locsin, Jr slammed Presidential Spokesperson Salvador Panelo for saying Malacanang doesn’t really mind signing an agreement on gas and oil exploration in the disputed waters of the South China Seadrafted by China.

In a tweet, Locsin blasted at Panelo: “Palace Com doesn’t care if it is a Chinese draft? I fu*k*n* care! “

Locsin further said: “A framework or architecture for gas and oil in our part of the sea demands the draft be MINE…MIO…FILIPINO. “

In an exclusive interview with CNN’s The Source hosted by Pinky Webb, Locsin expressed his appreciation that China trusted him to write the draft MOU , the details if which everybody wants to know but is not being made public yet.

Locsin said in the TV interview, the document he signed withChinese Foreign Minister Wang Yi last Nov.20 is a “Memorandum of Understanding to agree to arrive at an agreement.”

It is not a Memorandum Agreement as what the leaked Chinese draft showed.

As Locsin tweeted to netizen Zaldy Torres,

” It is a non-binding mechanism to work together and hopefully come to some agreement.”

Other features of the MOU that came out in the CNN interview:

– It does not mention Reed Bank or Recto Bank or Luyue Tan, theChinese name of the area which was the subject of the 2005 PH-China-Vietnam Joint Marine Seismic Undertaking during the Arroyo administration.

– It does not mention South China Sea.

– the MOU provides for the creation of an inter-governmental Joint Steering committee and one or more inter-Entrepreneurial Working Group.

The Committee will be co-chaired by the Foreign Ministers, and the co-vice chaired by the Energy Ministries.

– China authorizes China National Oil Corporation (CNOOC) to be the Chinese enterprise for each Working Group. The Philippines will authrorize the enterprise or enterprisies that has or have entered into a service contract with the Philippines with respect to the applicable working area or, if there is no such enterprise for a particular working area, the Philippine National Oil Company –Exploration Corporation (PNOC-EC) as the Philippine enterprise for the relevant working group.

– He also said that the MOU will govern how to arrive at the agreements when the moratorium is lifted.

The moratorium Locsin refers to is the ban on further exploration at Reed Bank under Service Contract 72 granted in 2010 by the Department of Energy to Forum Energy Plc. (FEP), an oil and gas exploration company incorporated in the United Kingdom with focus on the Philippines.

The majority shares of Forum Energy (64.45 percent)are owned by Philex Petroleum. Philex Mining Corp., which has Manuel Pangilinan as its chairman and chief executive officer owns 74.79 percent of Philex Petroleum.

Forum Energycould not proceed with the drilling in Reed Bank because Chinese ships were harrassing their ships.

In May 2012, at the same time that the Scarborough Shoal standoff was happening, Pangilinan met with CNOOC President Yang Hua to ask them to jointhe SC-72 exploration. Yang replied that CNOOC has also been awarded by the Chinese government to explore Reed Bank.

– the MOU and all discussions, negotiations will be without prejudice to the respective legal positions of both governments.

– the MOU does not create rights and obligations under international and domestic law.

-the two governments will endeavor to agree on cooperation arrangements within 12 months of the MOU.