Sep 192014
 

http://wikileaks.org/cable/2007/06/07MANILA1991.html#
Reference ID Created Released Classification Origin
07MANILA1991
2007-06-15 06:10
2011-08-30 01:44
CONFIDENTIAL
Embassy Manila

VZCZCXRO6069
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #1991/01 1660610
ZNY CCCCC ZZH
O 150610Z JUN 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6968
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 6129
RUEHGZ/AMCONSUL GUANGZHOU IMMEDIATE 4328
RUEHIN/AIT TAIPEI IMMEDIATE 1507
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUEKJCS/SECDEF WASHDC IMMEDIATE
C O N F I D E N T I A L SECTION 01 OF 02 MANILA 001991

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/15/2017
TAGS: PREL PBTS EPET CH VM RP
SUBJECT: NEXT STEP IN THE TRIPARTITE SEISMIC SURVEY IN
SOUTH CHINA SEA

REF: A. 06 MANILA 04848
¶B. 04 MANILA 05826

Classified By: Pol/C Scott Bellard, reasons 1.4(b) and (d)

¶1. (C) Summary: Phase II should begin in July for the
tripartite Marine Seismic Undertaking in the South China Sea.
Philippine authorities had temporarily delayed authorization
as the government decided whether to approve a Service
Contract with a UK-based oil company in an area within the
boundaries of the disputed zone. Pushed by the British
government but actively opposed by the Chinese, the Service
Contract appears still under consideration by the Philippine
government. This wrinkle highlights the inherent tensions
between forging ahead with lucrative private contracts on a
national basis and promoting the kind of regional cooperation
described in the 2002 Declaration on the Conduct of Parties
in the South China Sea between ASEAN and the PRC. End
summary.

——————
Beginning Phase II
——————

¶2. (C) The Joint Marine Seismic Undertaking for hydrocarbon
deposits in the South China Sea among the Philippines, China,
and Vietnam under a 2004 Tripartite Agreement (ref b) has now
received authorization by the Philippine government to
proceed, according to Philippine National Oil Company (PNOC)
Exploration Manager Raymundo Savella. Savella stated that
China and Vietnam had been “gung ho” to begin Phase II of the
joint survey since January 2007, but that the Philippine
Department of Energy (DOE) had withheld authorization until
June 15.

¶3. (C) Savella confirmed that officials of the three
national oil companies had basically completed the
interpretation of data acquired under Phase I (ref a) in
January, at which time they identified promising areas for a
follow-up survey under Phase II. Savella expressed relief
that his government’s authorization had come in time to take
advantage of the July availability of a Chinese survey
vessel.

——————-
Sidestepping a Snag
——————-

¶4. (C) According Sevilla, the DOE had initially withheld
authorization for Phase II because it was considering whether
to approve a new Service Contract with Forum Energy, a
UK-based oil company. The Service Contract would confer
exclusive rights, including appraisal drilling, to a block
called Reed Bank within the boundaries of the Joint Marine
Seismic Undertaking zone.

¶5. (C) Forum Energy had already been operating in Reed Bank
but only under a Geophysical Survey Exploration Contract
(GSEC) prior to the Tripartite Agreement. Sevilla noted that
PNOC had assured China in the past that Forum Energy’s GSEC
would be allowed to expire; instead, since 2005, DOE twice
extended it. Forum Energy has reportedly invested several
million dollars to acquire data, and has apparently
discovered a natural gas deposit in excess of 3.5 trillion
cubic feet.

¶6. (C) According to a senior British Embassy source, Forum
Energy officials “strenuously” lobbied the Philippine
government to convert the company’s GSEC to a Service
Contract, and the Embassy also advocated the company’s bid
with the DOE, while avoiding any reference to the Tripartite
Agreement, which at least one contingent within the
Philippine government has always considered as “rash.” While
Executive Secretary Ermita reportedly told Forum Energy that
a decision would be “forthcoming,” Department of Foreign
Affairs China Division Daniel Espiritu told poloff that it
was “impossible” the Philippine Government would ever approve
this new contract, due to the possible international
implications. Separately, DOE Undersecretary Guilermo Balce
confirmed to econoff that the Service Contract was still open
for consideration, but its approval was unlikely until
resolution of a “diplomatic impasse” with China.

—————–
China’s Objection
—————–

MANILA 00001991 002 OF 002

¶7. (C) PNOC’s Savella cited a recent Tripartite meeting at
which a Chinese representative referred to the Forum Energy
contract and pointed out to his Filipino counterparts: “If
you can do it, why can’t we?” Savella also claimed that the
recently-departed Chinese Ambassador had lodged his objection
to the Service Contract with the Philippine Energy Secretary.
The British Embassy source also noted “hearsay” that Chinese
Premier Wen Jiabao had even raised the issue with President
Arroyo during his visit to the Philippines in January.

——-
Comment
——-

¶8. (C) This early test to the Joint Marine Seismic
Undertaking underscores the inherent tensions between
upholding the principles and spirit of the 2002 Declaration
on the Conduct of Parties in the South China Sea between
ASEAN and the PRC along with preserving the Tripartite
Agreement — which President Arroyo publicly heralded as a
symbol of international cooperation in the South China Sea —
and lure of unilaterally pursuing potentially lucrative
commercial deals in the disputed area. For the time being at
least, the former policy priority has prevailed, again.

Visit Embassy Manila’s Classified website:
http://www.state.sgov.gov/p/eap/manila/index. cfm
KENNEY

   

 

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