The Energy Department is pushing for an agreement with China that will allow local oil and gas exploration companies to conduct exploratory drillings in South China Sea or West Philippine Sea.
“If we get an agreement, in same way in Panatag [Shoal], same arrangement that fishermen are able to fish undisturbed, that’s what we want to achieve in our exploration areas,” Energy Secretary Alfonso Cusi told reporters.
The department earlier issued a moratorium on oil and gas service contracts affected by the territorial dispute with China and other claimants in the West Philippine Sea.
“Joint exploration is not my priority concern. My priority concern is for the moratorium to be lifted and for those that we have given the service contract be able to resume work… It’s our responsibility for these people that we’re given service contract to be able to resume,” Cusi said.
Cusi said he was looking at ways on how holders of service contracts affected by the territorial dispute could be allowed to pursue exploration in the area.
“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, that we can push through with [them] before anything else. That’s where we should start,” Cusi said.
The Philippines is looking at other sources of natural gas with the expected depletion of the Malampaya gas field by 2024.
The government views service contract 72 (Recto Bank) as a potential source of natural gas, but developments in the area were put on hold over the territorial dispute.
The Energy Department retained the moratorium in exploration, despite the ruling of the Permanent Court of Arbitration in The Hague on July 12 in favor of the Philippines.
The high tribunal ruled that Recto Bank or service contract 72 was within the Philippines’ exclusive economic zone as defined under the United Nations Convention on the Law of the Sea.
SC 72 held by Forum Energy Plc covers an 8,800-square-kilometer area west off Palawan (Recto Bank) and is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
The company already spent around P1 billion for pre-development activities.
Aside from SC 72, the department also declared a force majeure on SC 75 held by PXP Energy Corp. (formerly Philex Petroleum Corp.) as the area is also located near SC 72 (Recto Bank).
Nido Petroleum Corp. of Australia and PNOC Exploration Corp. also obtained suspension of its work program under service contract 58.
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.