The government is not in hurry to explore the West Philippine Sea for oil and gas, after it received a favorable decision from the international tribunal in The Netherlands over a territorial dispute with China.
Energy Secretary Alfonso Cusi said the agency would not immediately lift the moratorium on exploratory drillings in the West Philippine Sea as it still needed to asses the impact of the decision by the United Nations-backed Permanent Court of Arbitration.
“Not so fast. We still need to study the decision and its implications,” Cusi told reporters.
“We will still be evaluating what would be our actions in relation to the decision,” the energy chief said.
Cusi said the Foreign Affairs Department along with all other government agencies concerned would thoroughly study the verdict of the Permanent Court of Arbitration under Annex VII of the 1982 United Nations Convention on the Law of the Sea on the arbitration proceedings initiated by the Philippines.
“The DOF [Department of Finance] will be assessing the over-all implications of the verdict in coordination with other agencies of the government, among them the Department of Energy,” Cusi said.
“The Philippines reiterates its abiding commitment to pursue a peaceful resolution of disputes in the South China Sea and promote peace and stability in the region through diplomacy and consultations,” Cusi said.
Several oil and gas contracts in the West Philippine Sea were suspended, pending the resolution of the territorial dispute with China.
These include Forum Energy Plc’s service contract 72, which covers an 8,800-square-kilometer area west off Palawan and is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
Philex Petroleum Corp., a subsidiary of Philex Mining Corp., controls majority of Forum Energy, which owns a 70-percent stake in SC 72, viewed as rich in petroleum reserves located at the Recto Bank in the West Philippine Sea.
Philex Petroleum’s stock jumped 14.5 percent to close at P5.38 Wednesday while the share price of Trans-Asia Petroleum Corp., another oil and gas exploration company, climbed 4.3 percent to P4.17.
The Energy Department last year granted a force majeure to Forum Energy on SC 72 due to the territorial dispute with China even as the company already spent P1 billion in pre-development activities.
Aside from SC 72, the department granted Philex Petroleum a force majeure on service contract 75 also northwest off Palawan, as the area is also located near SC 72.
Nido Petroleum Corp. of Australia and PNOC Exploration Corp. also suspended their work program under service contract 58 near the same area.
Nido said it obtained an approval from the Energy department in the fourth quarter of 2014 to place the service contract “into a period of suspension pending outcome of arbitration proceedings between the Philippines and the Peoples Republic of China over the ownership of the West Philippine Sea where SC 58 is located.”
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 northwest Palawan.
