Duterte tells of Xi gas deal offer if arbitration award is set aside

World | REUTERS 12 Sep 2019

Philippine President Rodrigo Duterte says Chinese President Xi Jinping 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 Xi told him recently 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.

"Set aside the arbitral ruling," Duterte was quoted as telling reporters in remarks provided by his office yesterday.

"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 40 percent will be theirs. That is the promise of Xi Jinping."

Chinese Foreign Ministry spokeswoman Hua Chunying did not give specifics at a media briefing yesterday, but said Xi noted cooperation would yield greater progress in exploiting the sea's resources.

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.

The Philippines' only accessible gas resources at the Malampaya fields are set to run out by 2024.

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