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 media.

This would certainly represent a rupture with the Marcos administration’s current policy toward maritime disputes with China. Since taking office, and especially in 2024 and 2025, Marcos has openly challenged China’s claims in the South China Sea, fortifying security relations with the United States and introducing a “transparency” policy that focused on publicizing the aggressive actions of the China Coast Guard in the Philippines’ EEZ. The continued frictions, which have been punctuated by clashes between the CCG and Philippine Coast Guard and navy vessels in disputed waters, have effectively ended any talks on joint oil and gas exploration, despite the pledges made by Marcos and Xi in early 2023.

Whatever the scope of possible cooperation with China in offshore resources, Marcos’ comments, and those of Lazaro, hint at a pending upturn in relations with Beijing. When asked by Bloomberg if he anticipates a “reset” in bilateral ties with China given the upheavals of global politics, he was surprisingly unequivocal.

“I think it’s certainly going to happen,” he said. “I don’t think that’s something that we can… like it’s an option. It’s happening now. There’s going to be a very, very serious restructuring.”

Marcos also told Bloomberg that the Philippines is in talks with China on fuel and fertilizer. “They’ve been very helpful with fertilizers,” he said. “We’ve always tried to differentiate territorial disputes from our trade arrangements.”

These comments are a sign of how the Middle Eastern conflict, and the broader capriciousness of the U.S. foreign policy under President Trump, may end up undermining Washington’s efforts to build a coalition to contain Chinese power and ambition. Any genuine move toward joint development of resources in the South China Sea would indeed mark a significant step toward concord between China and the Philippines.

Whether it actually happens, of course, is another question. Joint oil and gas exploration between the Philippines and China, let alone joint development of reserves, would have to surmount considerable constitutional and political hurdles. As Jeffrey Ordaniel, a leading Filipino analyst of maritime security and South China Sea issues, posted on X yesterday, the Philippine Constitution states that “the exploration, development, and utilization of natural resources must remain under the full control and supervision of the State, and may be undertaken only by the State itself or through Filipino citizens or corporations that are at least 60 percent Filipino-owned.”

As such, Ordaniel wrote, any arrangement with China would “have to operate under Philippine law and within a legal framework that recognizes Philippine sovereign rights in its EEZ” – something that the Chinese government is very unlikely to accept. In other words, such exploration and development would likely require a resolution to the maritime and territorial disputes in the South China Sea, which seems improbable in the current circumstances.

Any move by the Marcos administration to begin genuine talks about joint development and resource sharing would also have to reckon with the likely political backlash.

“How can you enter into an agreement of a joint exploration with someone who is trying to disrespect your sovereignty, undermine your sovereignty, and trying to annex your territory?” Senator J.V. Ejercito told the press yesterday, as per Inquirer.net.

“Trust is the very foundation of any relationship… I’m sorry, but I’m really consistent in saying that I don’t trust the Chinese government,” he added.

Recent public opinion polls have found that most Filipinos are generally distrustful of China and favor a robust response to its encroachments into the Philippines’ EEZ. Last year, a poll by the local pollster Stratbase found that 75 percent of Filipinos prefer candidates “who believe that the Philippines must assert our rights against China’s aggressive actions in the West Philippine Sea.” Whether this suspicion of China would potentially be outweighed by concerns about fuel shortages and economic stagnation remains to be seen.

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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 media.

This would certainly represent a rupture with the Marcos administration’s current policy toward maritime disputes with China. Since taking office, and especially in 2024 and 2025, Marcos has openly challenged China’s claims in the South China Sea, fortifying security relations with the United States and introducing a “transparency” policy that focused on publicizing the aggressive actions of the China Coast Guard in the Philippines’ EEZ. The continued frictions, which have been punctuated by clashes between the CCG and Philippine Coast Guard and navy vessels in disputed waters, have effectively ended any talks on joint oil and gas exploration, despite the pledges made by Marcos and Xi in early 2023.

Whatever the scope of possible cooperation with China in offshore resources, Marcos’ comments, and those of Lazaro, hint at a pending upturn in relations with Beijing. When asked by Bloomberg if he anticipates a “reset” in bilateral ties with China given the upheavals of global politics, he was surprisingly unequivocal.

“I think it’s certainly going to happen,” he said. “I don’t think that’s something that we can… like it’s an option. It’s happening now. There’s going to be a very, very serious restructuring.”

Marcos also told Bloomberg that the Philippines is in talks with China on fuel and fertilizer. “They’ve been very helpful with fertilizers,” he said. “We’ve always tried to differentiate territorial disputes from our trade arrangements.”

These comments are a sign of how the Middle Eastern conflict, and the broader capriciousness of the U.S. foreign policy under President Trump, may end up undermining Washington’s efforts to build a coalition to contain Chinese power and ambition. Any genuine move toward joint development of resources in the South China Sea would indeed mark a significant step toward concord between China and the Philippines.

Whether it actually happens, of course, is another question. Joint oil and gas exploration between the Philippines and China, let alone joint development of reserves, would have to surmount considerable constitutional and political hurdles. As Jeffrey Ordaniel, a leading Filipino analyst of maritime security and South China Sea issues, posted on X yesterday, the Philippine Constitution states that “the exploration, development, and utilization of natural resources must remain under the full control and supervision of the State, and may be undertaken only by the State itself or through Filipino citizens or corporations that are at least 60 percent Filipino-owned.”

As such, Ordaniel wrote, any arrangement with China would “have to operate under Philippine law and within a legal framework that recognizes Philippine sovereign rights in its EEZ” – something that the Chinese government is very unlikely to accept. In other words, such exploration and development would likely require a resolution to the maritime and territorial disputes in the South China Sea, which seems improbable in the current circumstances.

Any move by the Marcos administration to begin genuine talks about joint development and resource sharing would also have to reckon with the likely political backlash.

“How can you enter into an agreement of a joint exploration with someone who is trying to disrespect your sovereignty, undermine your sovereignty, and trying to annex your territory?” Senator J.V. Ejercito told the press yesterday, as per Inquirer.net.

“Trust is the very foundation of any relationship… I’m sorry, but I’m really consistent in saying that I don’t trust the Chinese government,” he added.

Recent public opinion polls have found that most Filipinos are generally distrustful of China and favor a robust response to its encroachments into the Philippines’ EEZ. Last year, a poll by the local pollster Stratbase found that 75 percent of Filipinos prefer candidates “who believe that the Philippines must assert our rights against China’s aggressive actions in the West Philippine Sea.” Whether this suspicion of China would potentially be outweighed by concerns about fuel shortages and economic stagnation remains to be seen.

Sebastian Strangio is Southeast Asia editor at The Diplomat. 

China-Philippines joint oil exploration

China-Philippines maritime disputes

China-Philippines relations

South China Sea disputes

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