ASEAN Beat | Diplomacy | Southeast Asia

Is the Philippines Really About to Restart Joint Oil Exploration With China in the South China Sea?

Even in the context of the current “energy emergency,” President Marcos’ proposal would have to surmount considerable constitutional and political hurdles.

Philippine President Ferdinand Marcos Jr. speaks to the public during a visit to the Parañaque Integrated Terminal Exchange in Parañaque City, Philippines, Mar. 24, 2026

On Tuesday, in an interview with Bloomberg Television, Philippine President Ferdinand Marcos Jr. said that he was open to restarting talks with China on joint oil and gas development in contested parts of the South China Sea, in light of the “energy emergency” facing the country due to the war in the Middle East.

In the interview, Marcos said that the war in Iran and the subsequent oil supply shock could provide an “impetus for both sides to come to an agreement” after years of friction in disputed waters.

“That’s something we’ve been talking about for a great deal, but territorial disputes are getting in the way of that,” he said. “That’s something we are exploring. Everything that might be of help, we are certainly pursuing.”

The interview aired on the same day that Marcos declared a “national energy emergency” due to the impacts of the war in the Middle East, and the “resulting imminent danger posed upon the availability and stability of the country’s energy supply.” Between February 23 and March 23, the Philippines saw the highest increase in petrol prices of any nation in the world, according to the AFP news agency.

The comments attracted considerable attention both within the Philippines, where it appeared to break with the Marcos administration’s stated policy on its maritime disputes with China, and internationally, where it intersected with ongoing debates about whether President Donald Trump’s war on Iran is ultimately aimed at undermining China.

However, the likelihood of any joint development is highly uncertain. The first thing to note is that a Bloomberg article quoting the interview did not make clear whether Marcos was referring to a specific project, or to joint oil and gas exploration in general. The article’s lede referenced “a joint oil and gas project in a disputed area of the South China Sea,” and it then referenced the Philippine firm PXP Energy Corporation, which holds a service contract for Reed Bank in the South China Sea. Located within the Philippines’ 200-nautical-mile exclusive economic zone (EEZ), this is believed to hold significant reserves of natural gas that could help offset the impending depletion of the country’s Malampaya gas field.

PXP Energy has previously held talks with China National Offshore Oil Corp. over possible joint development at Reed Bank, but negotiations have stagnated for more than a decade, with China “previously blocking attempts to explore in the region,” Bloomberg reported.

At the same time, Marcos was responding to a broader question of whether he would “consider developing gas resources with China in the disputed regions… in the South China Sea.” The Philippine leader, therefore, was likely to have been referring to general talks about joint oil and gas exploration with China, which he and Chinese leader Xi Jinping agreed to resume during Marcos’ state visit to Beijing in early 2023.

This undertaking came not long after Marcos’ predecessor Rodrigo Duterte terminated oil and gas exploration talks with China in mid-2022, with then-foreign affairs chief Teodoro Locsin saying discussions had gone as far as “it is constitutionally possible to go.” Locsin added that the Philippines wished to develop these resources, but “not at the price of sovereignty. Not even a particle of it.”

Speaking after the airing of Marcos’ interview on Tuesday, Foreign Secretary Theresa Lazaro said that there was no directive yet from the president to revive joint oil and gas exploration talks with China in the South China Sea, but added that such a move may be “forthcoming.”

“It is our view in the Department of Foreign Affairs that we put aside the issues in the West Philippines Sea and South China Sea because it’s not the whole of our relations with China,” she told the........

© The Diplomat