The government should focus on the development of liquefied natural gas terminals because the resumption of drilling for oil and gas in the West Philippine Sea may take a long time, according to an industry executive.
“I think it will take a long time to resolve the West Philippine Sea [issue] considering the hard stance of the Chinese government that the area belongs to them,” said Pete Maniego, chairman of the Energy Lawyers Association of the Philippines, during a forum organized by the European Chamber of Commerce of the Philippines.
“What we need is accept that probably we will not be able to drill there for a long time and accelerate LNG terminals because we need them,” Maniego said when asked for comment on the inability of petroleum service contractors to drill in the disputed areas.
PXP Energy Corp. earlier announced that it put on hold exploration activities over Service Contract 72 and SC 75 in the West Philippine Sea until all the clearances are issued by government agencies.
Surigao del Sur Rep. Johnny Pimentel warned that the Philippines could face a potential power crisis toward the end of the next president’s term, as China appears to be “holding hostage” the development of the world-class offshore Sampaguita gas discovery.
He said the Malampaya deep-water gas field is projected to run dry by 2027, and without fresh reserves from the Sampaguita gas field in SC 72, Luzon’s power supply could be threatened.
Maniego said that if the country could not have its own gas supply, it should import LNG and thus put in place LNG terminals.
“There are already some applications for that, but these are delayed and they are not moving fast enough because the projection is by 2024 or 2025 we will run out of Malampaya gas,” he said.
“We must accept that we might not be able to explore the West Philippine Sea and then move forward based on that assumption,” he said.
PXP earlier said it received a directive from the Department of Energy on April 6 to “put on hold all exploration activities for SC 75 and SC 72 until such time that the Security, Justice, and Peace Coordinating Cluster has issued the necessary clearance to proceed.” Alena Mae S. Flores
The SJPCC is a government cluster overseeing political, diplomatic and national security concerns.
The clearance from SJPCC is a precondition to any oil exploration in WPS, given the “political, diplomatic and national security implications of any activity” in the strategic waters.
PXP is the operator of SC 75, while Forum Energy Limited where PXP holds a majority interest is the operator of SC 72.