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Duterte: China Offered Oil Project Majority To Drop Territorial Claim

Duterte Xi

China’s President Xi Jinping offered a majority stake in a joint oil and gas exploration project to his Philippino counterpart Rodrigo Duterte in exchange for Duterte dropping a claim on parts of the South China Sea that China considers its own.

The information comes straight from President Duterte, who spoke to media this week.

"Set aside the arbitral ruling," CNN quoted Duterte as saying. "Set aside your claim. Then allow everybody connected with the Chinese companies. They want to explore and if there is something, they said, we would be gracious enough to give you 60%, they will only get 40%. That is the promise of Xi Jinping." 

China claims that as much as 90 percent of the South China Sea belongs to it and has proceeded to make its argument as pointed as possible without actually engaging in an open military confrontation. Most recently, the country targeted Vietnam with what a Vietnamese source called intimidation tactics to discourage drilling off the Vietnam coast.

The dispute with the Philippines became particularly tense after the Philippines won a court case at the Permanent Court of Arbitration in the Hague. China, however, refused to recognize the court’s ruling and has continued to pursue its own territorial agenda in the basin.

At the same time, Presidents Xi and Duterte have been meeting on a more or less regular basis in the last three years, evidently seeking a way to resolve the dispute. The latest meeting took place in late August and failed to result in anything specific.

Joint exploration for oil and gas has been on the table pretty much since the beginning as a way of settling differences, but the trade Xi is allegedly offering may not work for Duterte who has made it clear over the course of the negotiations that the Philippines would not be relinquishing its territorial claims.

By Irina Slav for Oilprice.com

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