Duterte Will Ignore South China Sea Ruling for China Oil Deal

(Bloomberg) -- Philippine President Rodrigo Duterte said he will ignore an international court ruling affirming his country’s territorial claims in the South China Sea in order to advance oil exploration plans with Beijing.

Duterte said in a media briefing late Tuesday that Chinese President Xi Jinping had promised a 60-40 revenue sharing scheme favoring the Philippines in oil exploration. The Philippine leader added that Beijing had urged him to set aside a 2016 arbitration nullifying China’s claims in the disputed sea. “That is the promise of Xi Jinping,” Duterte said.

Philippine Foreign Secretary Teodoro Locsin on Wednesday clarified Duterte’s remarks, tweeting that “China has never made setting aside the arbitral award a prerequisite to anything.”

The U.S. State Department has accused China of blocking Southeast Asian nations from accessing an estimated $2.5 trillion in unexploited hydrocarbon resources. Australian Prime Minister Scott Morrison urged Asian countries to stand up for their sovereign rights during a trip to Hanoi.

After a bilateral meeting late last month, Xi and Duterte agreed to advance oil talks by forming negotiating panels, but came short of a concrete deal.

To contact the reporter on this story: Andreo Calonzo in Manila at acalonzo1@bloomberg.net

To contact the editors responsible for this story: Cecilia Yap at cyap19@bloomberg.net, ;Daniel Ten Kate at dtenkate@bloomberg.net, Chris Kay, Karen Leigh

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