Oil-gas explorers allowed to resume work in WPS; moratorium lifted

President Rodrigo Duterte approved the recommendation of the Department of Energy to lift the suspension of petroleum activities and the resumption of exploration in the West Philippine Sea, Energy Secretary Alfonso Cusi said Thursday night.

“I thank the President for approving the DOE recommendation. We need to explore so we may address the country’s energy security,” Cusi said.

Under Republic Act 7638 or the “Department of Energy Act of 1992”, the DOE has the authority to regulate the exploration of the country’s indigenous energy resources.

“With the impending depletion of our natural gas reserve in Malampaya, it is the department’s position that there is an urgent imperative to resume exploration, development, and production activities within our EEZ to ensure continuity of supply of indigenous resources in the country,” Cusi said.

He said a “resume-to-work” notice was issued by the DOE to the service contractors doing petroleum-related activities in the areas of SC 59, 72 and 75 in the West Philippine Sea.

The activities there were suspended on the ground “force majeure” over the WPS dispute.

SC 59 and SC 72 are operated by the Philippine National Oil Company-Exploration Corp. and Forum Ltd., respectively.

PXP Energy Corp. operates SC 75.

Cusi said the lifting of the suspension would infuse the economy with fresh foreign direct investments and generate high-skills jobs, both of which are needed to boost economic recovery from the COVID-19 pandemic.

“The lifting of the suspension places the service contractors under legal obligation to put capital into the contract areas and hire Filipino engineers and technical workers to resume exploration,” he said.

Cusi said he had informed Foreign Affairs Secretary Teodoro Locsin of the President’s approval of the DOE recommendation. Cusi said the lifting of the moratorium was arrived at in good faith and with full regard of the negotiations between the Philippines and China and Forum Ltd. and the China National Offshore Corp.

“The oasis of peace that the Philippine Department of Foreign Affairs and the Chinese Ministry of Foreign Affairs envision must also be an oasis of prosperity. For this to happen, the Philippines must restart its economy using the engine of energy resiliency and security,” Cusi said in a letter to Locsin.

Cusi said the lifting of the moratorium on oil and gas exploration activities in the West Philippine Sea will not affect the ongoing talks between the Philippines and China for a possible joint exploration in the area.

“It’s done in good faith because we signed an MOU together with China so saying it’s in good faith because it does not affect that MOU. It does not stop the joint development activities that we might arrive at with China,” Cusi said in a virtual briefing.

Cusi said there were talks between the Philippines and China for a possible joint exploration development over the West Philippine Sea but these was suspended due to the coronavirus pandemic.

“There is no prohibition in doing it unilaterally. We can do it and what we have done is a unilateral decision on our part to ask those licensees to start their activities in the West Philippine Sea,” Cusi said.

Cusi said the move will not affect the Philippines’ claim to the disputed areas of the West Philippine Sea and said China was not informed of the latest decision. With Willie Casas

“I did not inform China that we are going to lift (the moratorium)…I’m sure they will not just take it without raising a word. I’m sure they will write to us and we will address that as it comes,” he said.

According to the DOE, the estimated investments by the service contractors is $25 million upon lifting of the force majeure and a total of $78 million for the total remaining work commitment program period of exploration.

Former Foreign Affairs secretary Albert del Rosario welcomed the lifting of the moratorium on oil exploration, calling it a constructive move.

“For as long as we pursue activities with China that is in accordance with Philippine law, this would be a step in the right direction towards a peaceful settlement of disputes,” he said.

Senator Sherwin Gatchalian said the lifting of the moratorium on oil and gas exploration in the West Philippine Sea was a welcome development in view of the dwindling supply of natural gas from the Malampaya reservoir.

Gatchalian, chairman of the Senate energy committee, said the Malampaya reservoir accounts for 20 percent of power supply of the country and almost 30 percent of Luzon’s needs.

Following the lifting of the moratorium, he noted that the stalled exploration and appraisal activities in Service Contracts 59, 72 and 75 can now resume.

He said these could be new sources of oil and gas which can secure, if not contribute to stabilizing the country’s energy supply.

But the leftist League of Filipino condemned the move, saying it sold out the countries natural resources. – With Willie Casas

Topics: Rodrigo Duterte , Department of Energy , West Philippine Sea , Alfonso Cusi
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