Chinese offshore operator CNOOC Ltd has confirmed its ongoing interest in exploring Service Contract 57 off Palawan, but said it is waiting for the Philippines government to approve a production sharing contract.

The company told Upstream that it would act as operator of the block under the proposed PSC, which covers acreage located in non-disputed waters off the Philippines.

CNOOC Ltd farmed in for a 51% stake in the block in 2006, but no exploration activities have been carried out pending the approval by the Philippines government of the farm-in contract, according to the Chinese oil company.

Sources said that paperwork has already been done and the contract is now with Philippines President Rodrigo Duterte for his signature.

The Department of Energy originally awarded state-owned PNOC-EC a PSC in 2005 to explore SC 57 in the Calamian area.

In a 2005 agreement, CNOOC Ltd farmed in with a controlling 51% stake during the exploration period, with PNOC-EC holding 28% and Malaysia’s Jadestone Energy, which was formerly known as Mitra Energy, having 21%.

According to Energy Secretary Alfonso Cusi, the project has been pending since 2008 due to tax inclusion and other issues.

Jadestone said that the project is currently under force majeure, pending government approval of a working interest assignment to Jadestone Energy and CNOOC Ltd.

SC 57 covers more than 7000 square kilometres in shallow to deep waters ranging from 50 metres to 3000 metres. The block is on trend with the giant Camago-Malampaya gas field. If joint exploration were resumed, it would be a major milestone in oil and gas co-operation between China and the Philippines.

The two countries have been at odds over the disputes of the sovereignty of some areas in the South China Sea. In 2005, China, Vietnam and the Philippines signed an agreement to jointly conduct a seismic survey in a disputed area in the South China Sea covering 143,000 square kilometres.

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CNOOC Ltd waits on PSC approval in Philippines