(Bloomberg) -- Philippine Foreign Secretary Alan Peter Cayetano is confident that an agreement with China to jointly explore for oil and gas in South China Sea can be signed this year.
The Philippines wants a legal framework before it will set aside a ban on joint exploration in territory claimed by either country, Cayetano told reporters in Manila on Wednesday.
"We are not lifting the moratorium until we have a legal framework that’s acceptable to both parties," he said.
A commercial pact would follow, depending on the extent of proven resources.
Philippine President Rodrigo Duterte discussed the possibility of a joint exploration agreement with his Chinese counterpart Xi Jinping in Hainan earlier this month. It was Duterte’s third visit to China as president, with Xi set to visit Manila in November.
The U.S. Energy Information Administration has estimated natural gas reserves of up to 4 trillion cubic feet in the South China Sea.
China’s claims to more than 80 percent of the waters of the South China Sea were rejected in 2016 by an international tribunal in a case brought by Duterte’s predecessor, Benigno Aquino.
Duterte set aside the ruling -- instead of trying to enforce it -- in the hope of striking better outcomes through direct negotiation with Beijing.
©2018 Bloomberg L.P.
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