Duterte says Xi offering gas deal if case ignored

Philippine President Rodrigo Duterte said his Chinese counterpart has offered Manila a controlling stake in a joint energy venture in the South China Sea if it sets aside an international arbitral award that went against Beijing. Duterte said Chinese President Xi Jinping told him during their recent meeting that if he ignored the Permanent Court of Arbitration’s 2016 ruling, China would agree to be the junior partner in a joint venture to develop gas deposits at the Reed Bank, located within Manila’s Exclusive Economic Zone (EEZ). “Set aside the arbitral ruling,” Duterte was quoted as telling reporters late Tuesday in remarks provided by his office on Wednesday. “Set aside your claim,” he said, quoting Xi.

“Then allow everybody connected with the Chinese companies. They want to explore. If there is something, they said, we will be gracious enough to give you 60 percent, only 40pc will be theirs. That is the promise of Xi Jinping.” Chinese Foreign Ministry spokeswoman Hua Chunying did not give specifics at a briefing on Wednesday on the exchange between the presidents but said Xi noted that cooperation would yield greater progress in exploiting the sea’s resources.

Hua said Duterte had expressed willingness to hasten maritime oil and gas exploration and development cooperation between China and the Philippines. With regard to some “specific situations,” working groups between the two sides would consult closely, she said. The tribunal in The Hague clarified maritime boundaries and the Philippines’ sovereign entitlements, and in doing so, invalidated China’s claims to almost the entire South China Sea.

China does not recognize the ruling. Duterte has sought to befriend Xi, hoping to secure billions of dollars of investment, avoiding challenging China over its activities in the South China Sea, including its militarized artificial islands.