THE SPRATLY POKER GAME

By Bernie Lopez

There are five people on the poker table – Philippines, Vietnam, Malaysia, China and the U.S. All are holding hands the others cannot see and will not see until the betting is over. And it won’t be over soon, give or take a decade.

Let us see how they play their hands. The Philippines, Vietnam and Malaysia do not have a lot of chips. They can play their hands only so far and they know it. They are not in a position to bluff as China will call it anytime. Vietnam and Malaysia are minor players. They are in for the ride. But the Philippines is a major stakeholder only because the Spratly is within its 200-kilometer zone and we have an age-old claim. But, still, we do not have a lot of poker chips, which is the name of the game.

The Philippines, Vietnam and China signed a Joint Marine Seismic Undertaking (JSMU) in 2004. No one complained then. Why was there a complaint recently? Simple, the fourth guy in the game, the U.S., who is standing behind the scene looking innocent, but is not really, raised the ante by coming out with an article in the Far East Economic Review. The article made the Filipino a scapegoat by saying we ‘sold out’ against our ASEAN partners in favor of China. We were the traitors, says the articles. This later became an accusation of treason against GMA in the Philippine press. The US adopted the Barack-Hillary mud-slinging frenzy against both China and the Philippines.

It was the apple of discord and its intent was to throw a monkey wrench in the JSMU before they truly indeed find some oil. The predator Eagle is just as interested as the predator Bear in any oil that can be found in the area. If you understand this geopolitical backdrop, you begin to understand the actuations of the players and how they play their hands. Phase one is the two big players out to step on or use the three small players for their own end. Phase two is the two big players out for a big showdown when the underlings are dealt with. That China and/or the US will use the Philippines to finally get the oil in the Spratly is a foregone conclusion. They are willing to give us the crumbs and the trickles, but only if we ‘behave’ according to their game plan.

But remember the JSMU is not exclusive. We have an option of making our poker hand better by asking a third party to explore at terms less oppressive than those offered by US and China oil firms. The most obvious third hand is Russia. The US will do everything in its power to prevent a Russian foothold in the Philippines. Shell will surely cringe from Gazprom in Philippine waters.

The way Shell treated the Philippine government in Malampaya is the way the US will treat the Philippines as landowner in Spratly, namely – give them the crumbs. That is, if we are indeed proven to be the real landowner. We are still far from that. Shell Malampaya is the example of the modus operandi of all oil multinationals worldwide. That is why US oil giants Chevron, ConocoPhillips and Exxon Mobil are being thrown out of Kazakhstan in favor of Russian pipelines. They are also losing ground in the Caspian sea. At the emergence of a global energy crisis, there is a worldwide trend for oil-rich nations to ‘nationalize’ oil fields controlled by Western giant oil firms which give trickles to the host nation only because they foot the large development bill.

 

China’s JSMU ploy was ingenious. It pre-empted both US and ASEAN initiatives in the Spratly which were not moving anyway. There are two opposing Filipino views on the JSMU. One says we are selling our patrimony, the way the US wants us to think. The other says JSMU on the contrary is an ADMISSION of our patrimony and territorial rights. It implies they have to deal with us if there is any oil found. This makes some sense. But of course, we go back to square one. Even if we are indeed the landowner, if China, which has a lot of chips, raises the pot to develop the oil wells, they still get the lion share. Whether we get a Chinese or an American oil giant as partner, it is the same banana offering crumbs. It’s the Malampaya syndrome all over again. Damn if we do own it, damn if we don’t. We get the crumbs. That is the way the poker game goes for small players. They always lose in the end.

The US can rock the boat before the JSMU can hit pay dirt by talking to the Philippines, covert or overt, about its own exploration initiatives. So there may be two coinciding explorations all at once out there. Shell, which has nearby Malampaya, is the most obvious oil explorer. Even if the JSMU hits pay dirt, the US can still continue exploring nearby areas. But getting a third party to explore on better terms will make our poker hand better.

For us Filipinos, the Spratly is about politics and a bit of the crumbs. For the US and China, it is about millions of barrels in oil, nothing else. We have to play our hand well, even if we have very little chips because we need the crumbs badly.

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