The Department of Energy expects to come out with the guidelines for the joint Philippines-China oil and gas exploration in the West Philippine Sea within one year, Energy Secretary Alfonso Cusi said.
The Philippines and China agreed to cooperate on oil and gas development as part of the deals forged during the Manila visit of Chinese President Xi Jinping.
“[Under] that MOU [memorandum of understanding], we have to sit down immediately and come out with our position and we should do it if I remember it right within a period of no more than one year. That is for us to come out with ways to harness the resources, or do a joint development or joint exploration,” Energy Secretary Alfonso Cusi said.
Cusi said the agreement focused on how to move forward with a joint cooperation to explore for oil and gas reserves in the disputed areas. No joint exploration agreement, however, was signed.
“Under the MOU, the conflicted area, we are talking about how to develop ways, on how are we going to explore, develop, exploit the resources there,” the energy chief said.
“[The] DFA [Department of Foreign Affairs] and DoE will sit down with Chinese counterparts and further discuss what will be done,” he said.
Cusi also raised the urgency of lifting the moratorium on oil and gas exploration in the disputed areas.
“We want to lift it…but as we do so, we do not want to create problems that we may not be able to handle..There’s also urgency to that but we don’t want to impose a timeline that is not within our control because there are other factors we have to consider…The president is pushing us to solve the problem,” he said.
Cusi cited the need to develop the country’s indigenous resources to reduce the country’s dependence on imported fuels.
He said his department was aggressively promoting the 1st Philippine Conventional Energy Contracting Program which was officially launched Thursday with around 65 foreign firms and 200 local firms in attendance.
“We are trailing behind our neighbors in our upstream petroleum activities. We have only drilled an average of five wells in a 10-year period. Five wells vis-à-vis the double and triple averages of other Asean countries,” Cusi said.
“The PCECP will address the lack of petroleum exploration in the country. The program was enhanced to encourage stakeholders to invest, explore, develop and produce the nation’s indigenous energy resources. It is our intensified approach to harness these resources for long-term energy security and energy self-sufficiency,” Cusi said.
The DoE identified 14 pre-determined areas for potential petroleum exploration and development activities under PCECP. These are Area 1 (Cagayan Basin), Areas 2, 3 and 4 (East Palawan Basin), Areas 5, 6 and 7 (Sulu Sea), Areas 8 and 9 (Agusan-Davao basin), Area 10 (Cotabato Basin) and Areas 11, 12, 13 and 14 (West Luzon).
“Alternatively, investors may also nominate respective areas of interest outside of the PDAs,” Cusi said.
The PCECP is the DOE’s revised and transparent petroleum service contract awarding mechanism that allows the government to develop and utilize indigenous petroleum resources under a service contract with qualified local and international exploration companies.
Under the PCECP, awarding of service contracts are conducted either through the competitive selection process or via nomination.
