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Energy recommends lifting of ban on West Philippine Sea exploration

The Energy Department officially recommended to the Department of Foreign Affairs the lifting of the moratorium on oil and gas exploration in the West Philippine Sea amid the enhanced relations between China and the Philippines, officials said.

Energy Resource Development Bureau director Ismael Ocampo said the recommendation was submitted to the DFA, on the request of PXP Energy Corp. through Forum Energy Ltd. to lift the force majeure imposed on Service Contract 72 or the Recto Bank.

“Our main concern is energy security,” Energy Undersecretary Felix William Fuentebella said, adding the move was in line with the government’s thrust to explore for more indigenous sources of energy.

Fuentebella said the Philippines was left behind by its Southeast Asian neighbors in the area of oil and gas drilling.

PXP sent the letter of request to the DoE last month requesting the lifting of the force majeure in the wake of the signing of the memorandum of understanding between the governments of the Philippines and China for the cooperation over the West Philippine Sea.

“We see the lifting of the force majeure as a positive development for our SC 72 block and for the country in general,” Forum Energy country representative Daniel Stephen Carlos said earlier.

Forum Energy, where PXP holds a direct and indirect interest of 78.98 percent, has a 70-percent  participating interest in SC 72 located in Northwest Palawan, through wholly-owned subsidiary Forum GSEC. PXP has a total economic interest of 53.1 percent in SC 72.

PXP is an upstream oil and gas company incorporated in the Philippines whose shares are listed on the  Philippine Stock Exchange. The company, directly and indirectly, owns oil and gas exploration and production assets in the Philippines, and indirectly owns an exploration asset located in offshore Peru. 

Energy Secretary Alfonso Cusi earlier advised PXP Energy to apply for the lifting of the moratorium on its service contracts amid the recent breakthrough in negotiation between the Philippines and China.

Cusi also expressed keen interest to immediately meet with his Chinese counterpart to draw up the framework of the oil and gas cooperation over West Philippine Sea or South China Sea.

“I have already expressed my intention to meet, my Chinese counterpart. I have sent my message already that I want to meet immediately,” Cusi said.

The Philippines and China agreed to cooperate on oil and gas development, as a part of the deals forged during the visit of Chinese President Xi Jinping in November.

“The MOU is to explore a solution. I don’t want more delays, so I gave notice to meet already,” Cusi said,

He said the notice was directed to China but coursed through the Department of Foreign Affairs.

“To China through DFA, I am ready. I want to meet immediately, anytime, anywhere. I am not passive, I’m saying let’s meet already,” Cusi said.

Energy assistant secretary Gerardo Erquiza said DoE advised DFA as a “matter of protocol.”

“Anytime we can start and go through the process, we just have to go through some details,” Erquiza said.

He assured that the framework would work within the service contract system of the Philippines and “sets forth the elements of the Philippine jurisdiction.”

Topics: Department of Energy , Department of Foreign Affairs , West Philippine Sea , Energy Resource Development Bureau , Ismael Ocampo
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