Philippines Wants ‘Decisive’ Action on China Sea Oil Claims

The Philippines called for Southeast Asian leaders to play a “decisive role” in brokering a resolution with China over disputed areas of the South China Sea that contain oil and gas resources.

The 10-member Association of Southeast Asian Nations should facilitate talks between claimants to “define the undisputed and the disputed areas for the purpose of establishing a Joint Cooperation Area” in the waters, Foreign Affairs Secretary Albert del Rosario said today. The bloc is meeting in Bali this week for a regional summit that will include U.S. President Barack Obama and Chinese Premier Wen Jiabao.

“Asean is now at a critical junction of playing a positive and meaningful role to contribute in the peaceful resolution of the disputes,” del Rosario said in an e-mailed statement. The bloc “must play a decisive role at this time if it desires to realize its aspirations for global leadership.”

An agreement on boundaries would determine access to oil reserves in the South China Sea that may total as much as 213 billion barrels, according to Chinese studies cited in 2008 by the U.S. Energy Information Agency. The Philippines and Vietnam reject China’s map of the sea as a basis for joint development.

China’s Map

The Philippines proposed in May dividing up land features and setting maritime boundaries according to the United Nations Law of the Sea, a move that would cost China rights to a large swath of the waters now encompassed by its tongue-shaped nine- dash map that extends hundreds of miles south from Hainan Island to the equatorial waters off the coast of Borneo. The nine-dash line is “the core of the problem,” del Rosario said.

“The intervention of outside forces” won’t help settle territorial disputes in the South China Sea, Chinese Assistant Foreign Minister Liu Zhenmin told reporters today in Beijing. Such interference only sabotages peace and development in the region, he said.

Asean and China agreed in July on non-binding guidelines for operating in the seas designed as the first step toward a binding code of conduct. U.S. Secretary of State Hillary Clinton has urged the claims to be settled according to international law based on land features, mirroring the Philippines’ proposal.

‘Nationalistic Pressure’

Asean leaders will have a hard timing coming up with a solution that requires China to adjust its territorial claims, said Gary Li, an analyst with Exclusive Analysis Ltd., a London- based business advisory firm.

“If there is the smallest hint of compromise, the Chinese can’t go for it,” he said. “They’re restricted systemically by policy, by precedent, by nationalistic pressure.”

The U.S.’s alliance with the Philippines has led to tensions with China, which has used patrol boats to disrupt hydrocarbon survey activities in disputed waters. Chinese vessels in May sliced cables of a survey ship doing work for Vietnam, the second such incident in a month. In March, Chinese ships chased away a ship working for U.K.-based Forum Energy Plc (FEP) off the Philippines.

The U.S. has claimed a national interest in the waters, accounting for about 20 percent of $5.3 trillion in annual trade that passes through the sea, according to Admiral Robert Willard, the head of U.S. Pacific Command. China has sought to keep the disputes off the agenda at regional forums, preferring to discuss the issues in one-on-one talks with each country.

‘Vital Region’

“The United States and our partners in multilateral forums such as Asean have expressed concern over the past year regarding assertiveness on the part of China in this region,” Willard told reporters in Honolulu, Hawaii on Nov. 14.

“We continue to seek to dialogue with China in those areas in order that they will constructively contribute to the security of this vital region.”

Two sets of island groups, the Spratlys and Paracels, are contested in the South China Sea. The Paracels to the north are fully controlled by China, which ousted fellow claimant Vietnam from the 30 islets and reefs in a 1974 battle in which 71 soldiers were killed.

The Philippines, Vietnam, China, Malaysia and Taiwan have troops further to the south on the Spratlys, a group of islands and reefs with a total land area equivalent to 1 1/2 times the size of New York’s Central Park spread over an area roughly the size of Iraq.

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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