World

Duterte: Xi offers gas deal if Philippines sets aside arbitral award

MANILA: Philippine President Rodrigo Duterte said his Chinese counterpart has offered Manila a controlling stake in a joint energy venture in the South China Sea, if it sets aside an international arbitral award that went against Beijing.

Mr Duterte said Chinese President Xi Jinping told him during their recent meeting that if he ignored the Permanent Court of Arbitration's 2016 ruling, China would agree to be the junior partner in a joint venture to develop gas deposits at the Reed Bank, located within Manila's Exclusive Economic Zone (EEZ).

"Set aside the arbitral ruling," Mr Duterte was quoted as telling reporters on Tuesday.

"Set aside your claim," he said, quoting Mr Xi. "Then allow everybody connected with the Chinese companies. They want to explore. If there is something, they said, we will be gracious enough to give you 60 per cent, only 40 per cent will be theirs. That is the promise of Xi Jinping."

CHINA SILENT

China's foreign ministry did not immediately respond to requests for comment on Mr Duterte's remarks.

The tribunal in The Hague clarified maritime boundaries and the Philippines' sovereign entitlements, and in doing so, invalidated China's claims to almost the entire South China Sea. China does not recognise the ruling.

Mr Duterte has sought to befriend Mr Xi, hoping to secure billions of dollars of investment, avoiding challenging China over its activities in the South China Sea, including its militarised artificial islands.

A joint project with China has been talked about for decades, but has gone nowhere.

Any agreement to forget the arbitral award and team up with China would be a major setback to other claimants, especially Vietnam and Malaysia, which like the Philippines have experienced repeated challenges from China inside their EEZs.

Mr Duterte did not reveal if he had agreed to Mr Xi's offer. - REUTERS

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