An MOU has just been signed between Philippine’s state-owned Philippine National Oil Co (PNOC) and China’s state-run CNOOC to marking the agreement.

The islands, in the South China Sea, are either claimed entirely or in part by the nations of China, Philippines, Taiwan, Vietnam, Malaysia and Brunei.

In a statement Philippines Energy Secretary Vincent Perez said, “The MOU will focus on pre-exploration research study on the Spratlys. It is a three-year study to collect, process, and analyse seismic data on certain areas of the South China Sea as part of the energy independence package of President [Gloria Arroyo] to promote our own indigenous oil and gas resources.”

“The two oil companies [have] agreed to share data and costs of operation. The estimated pre-exploration will cost US$7 million to determine the presence of oil and gas reserves in the disputed area,” he added.

Perez was quick to reiterate the JV does not mean the two countries are giving up their respective territorial claims to the islands. According to Perez, “This agreement between the two oil companies is by no means imply that we are waiving any rights or claims to South China Sea. It is merely an undertaking to study, research and find out petroleum potential there.”

“[But] the oil exploration agreement can be seen as a diplomatic breakthrough from the point of view of the Philippine and Chinese government because it is the first concrete manifestation of the Asean-China Declaration of Conduct for the South China Sea,” Perez added, referring to the November 2002 declaration between the six countries who claim the Spratlys.