Philippines President Rodrigo Duterte has signalled he is prepared to remove the force majeure that has for years effectively stalled exploration in the West Philippine Sea — a contested area of the South China Sea.
Energy Secretary Alfonso Cusi told reporters that Duterte has approved the Department of Energy’s (DoE) recommendation “to lift the suspension of petroleum activities and the resumption of petroleum exploration in the WPS".
As soon as the moratorium is officially lifted, companies such as China National Offshore Oil Corporation (CNOOC) and local players PXP Energy and Udenna will be able to resume seismic acquisition and drilling activities, provided they have the financial resources.
“We need to explore, so we may address the country’s energy security,” Cusi said.
He added that the lifting of the moratorium was decided “in good faith and with full regard” to the ongoing negotiations between the Philippines and China, Forum Energy CNOOC.
PXP Energy, a company of Filipino tycoon Manny Pangilinan, had been the driving force behind pushing the DoE to repeal the exploration moratorium — a move that has taken some two years to be realised, the Manila Bulletin reported on Friday.
CNOOC and national upstream company PNOC EC have been in talks about joint exploration on offshore Service Contract 57 (Calamian) off northwest Palawan.
Long-running dispute in South China Sea
Exploration activity in the maritime area has been on ice since a force majeure was declared several years ago due to a territorial waters dispute between China and the Philippines.
Cusi confirmed that resume-to-work notices were issued by the DoE to the service contractors carrying out petroleum-related activities in SCs 59, 72 and 75 in the West Philippine Sea.
“With the impending depletion of our natural gas reserves 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 said, referring to the Shell-operated Malampaya gas field.
Deep-water SC 59 lies north of PTTEP’s producing Kikeh oilfield, Malaysia’s first deep-water development.
Beijing hopes that China and the Philippines will promote the joint development of oil and gas resources in the South China Sea, Foreign Ministry spokesman Zhao Lijian said on Friday.
Zhao made the remarks after Duterte lifted the six-year moratorium on petroleum exploration in the disputed region.
"China and the Philippines have reached consensus on the joint development of oil and gas resources in the South China Sea and have established a cooperation mechanism for relevant consultations," China Daily reported Zhao as saying at a daily news briefing.
Updated to add comments from China's Foreign Ministry.