Drilling for oil in disputed sea may resume this year, Philippines officials confirmed

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Philippine President Rodrigo Roa Duterte holds a news conference on Oct. 14. (Photo courtesy of the Presidential Communications Operations Office)

The Philippines announced a new plan of oil exploration

Philippine Energy Secretary Alfonso Cusi said PXP Energy Corp. can survey Reed Bank in the disputed sea even without partnering with China National Offshore Oil Corp. A unit of the Philippine oil exploration company, which is in talks with CNOOC, holds the right to drill for oil and gas in the area under Service Contract 72, one of the five such contracts allowed to resume exploration.

“If they can do it by themselves, go ahead,” Cusi said at a virtual briefing Wednesday when asked if PXP should seek China’s permission to proceed with a survey. “If they can’t do it and they need a partner, they have to partner with China”, said Bloomberg.

PXP Chairman Manuel Pangilinan on Wednesday said it has submitted a preliminary work program to the Department of Energy. The Reed Bank may need another survey, Pangilinan said last week, adding he is “not aware” if exploration can proceed without China’s permission.

Meanwhile, the Philippines is also opening up to other energy sources like gas, geothermal and hydro-power by banning new coal-fired power plants, Cusi said at the same briefing. It’s also crafting a national policy on nuclear power, he said.

An aerial shot of a reef in the disputed Spratly islands. (Photo: AFP)

Philippines may change its stance in dispute with China

The Philippines suspended exploration at the Reed Bank, which it calls Recto Bank, in late 2014, as it pursued international arbitration over territorial disputes. The bank is in waters claimed by China, Reuters cited.

President Rodrigo Duterte last month lifted a six-year ban on South China Sea oil exploration, which his spokesman described as an assertion of the Philippines’ rights in disputed waters. The Philippine leader has recently toughened his stance against China and leaned back toward the US, which has also been stepping up its criticism of Beijing’s actions in the disputed waters, according to Bangkok Post.

China will likely block new exploration in contested waters, as shown in recent disputes with Vietnam and Malaysia, according to Gregory Poling, director of the Asia Maritime Transparency Initiative in Washington.

Philippine Energy Secretary Alfonso Cusi said the lifting of the moratorium "was arrived at in good faith and with full regard of the ongoing negotiations between the Philippines and China, and Forum Ltd. and the China National Offshore Oil Corp."

"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 [exclusive economic zone] to ensure continuity of supply of indigenous resources in the country," Cusi was quoted by Nikkei Asia.

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