The Energy Department is not keen on a joint petroleum exploration activity with other countries in the disputed areas of the West Philippine Sea.
Energy Secretary Alfonso Cusi said in a radio interview he preferred the resumption of oil exploration activities in service contracts affected by the dispute.
“I’m personally hoping not for the joint exploration but I’m hoping that the suspended exploration service contracts that we have already awarded, and those contracts under moratorium, … (will) push through… before anything else. That’s where we should start,” Cusi said.
The Philippines is looking at other sources of natural gas with the eventual depletion of the Malampaya gas field by 2024. The government is looking at service contract 72 (Recto Bank) as a potential source of natural gas but any development in the area is on hold due to the territorial dispute with China and other claimants.
Despite the ruling of the Permanent Court of Arbitration in The Hague on July 12 on the maritime case filed by the Philippines against China favoring the Philippines, the department kept the moratorium pending clarification on the case.
The tribunal ruled that the Recto Bank where service contract 72 lies was is within the Philippines’ Exclusive Economic Zone as defined by the United Nations Convention on the Law of the Sea.
Service contracts covered by the moratorium include Forum Energy plc’s SC 72, which covers an 8,800-square-kilometer area west off Palawan (Recto Bank). It is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
The department earlier granted a force majeure to Forum Energy on SC 72 due to the territorial dispute even as the company already spent around P1 billion for pre-development activities.
Aside from SC 72, the department granted PXP Energy Corp. (formerly Philex Petroleum Corp.) a force majeure on SC 75 in offshore northwest Palawan after the company sought for clarification as the area is also located near SC 72 (Recto Bank) and SC 58, all in northwest Palawan.
Nido Petroleum Corp. of Australia and PNOC Exploration Corp. also suspended their work program under service contract 58 in offshore Northwest Palawan due to the dispute with China.
SC 58 is a deep water acreage covering an area of 13,440 sq km west of SC 57 and service contract 38, or the Malampaya gas field in the offshore northwest Palawan.
“As of now moratorium stays… until we can clarify and resolve the conflict. This is diplomatically being done by DFA (Department of Foreign Affairs),” Cusi said in a separate interview.
He said the West Philippine Sea territorial dispute and a possible joint exploration was not discussed during President Rodrigo’s recent visit to China.