July 13, 2016 9:41 pm by VOLTAIRE PALAÑA, REPORTER
Department of Energy
(DOE) Secretary Alfonso Cusi said on Wednesday that the Department of Foreign
Affairs (DFA) would lead concerned government agencies in assessing the
favorable verdict of the UN Permanent Court of Arbitration on the West
Philippine Sea (South China Sea).
“The DFA will be
assessing the over-all implications of the verdict in coordination with other
agencies of the government, among them the Department of Energy,” Cusi said.
“The Philippines
reiterates its abiding commitment to pursue a peaceful resolution of disputes
in the South China Sea and promote peace and stability in the region through
diplomacy and consultations,” new energy chief said.
China and the
Philippines have overlapping claims over the Spratly archipelago, a
resource-rich South China Sea chain, as well as over nearby shoals, reefs and
banks and their adjacent waters.
The Spratlys are also
claimed in whole or in part by Brunei, Malaysia, Taiwan and Vietnam.
In 2012, Former DOE
Secretary Zenaida Y Monsada, who was DOE Director for Oil Industry Management
Bureau (OIMB), said that the West Philippine Sea from Northern Luzon, all the
way to Palawan, particularly the hotly contested Scarborough Shoal, are
potential areas for oil exploration.
The Aquino
Administration as early of 2011 offered many blocks for exploration and
development to interested multi-national companies with the capacity to drill
oil offshore.
The DOE under Aquino
offered a total of 15 exploration contracts, mostly offshore prospects off the
western island of Palawan.
DOE did not give
details beyond saying the blocks would include East Palawan—an undersea section
of the West Philippine Sea—as well as Northwest Palawan and the Sulu Sea
basins.
“The contracting round
is expected to attract investments in oil and gas exploration activities which
will contribute to the realization of the country’s energy self-sufficiency
level target of 60 percent,” DOE said at the time.
“Independent and
large-scale international exploration companies… have already expressed their
interest to tender their bid in the various blocks,” it added.
But in March last year
DOE suspended all drilling and exploration works in the West Philippine Sea,
particularly in the area covered by Service Contract (SC) 72 in the Reed Bank,
citing a force majeure as the site is the subject a territorial dispute between
the Philippines and China.
Philex Petroleum Corp.
has a substantial stake in SC 72, as does Monte Oro Resources and Energy Inc.,
according to previous filings of Philex Petroleum with the Philippine Stock
Exchange.
Philex Petroleum holds
a 60.49 percent interest in Forum Energy – which operates SC 72 in Reed Bank –
also called Recto Bank, covering the Sampaguita Gas Field as well as several
oil and gas leads. In turn Forum Energy has a 70-percent stake in SC 72.
Territorial disputes
between the Philippines and China have hampered Forum Energy’s plan to drill at
least two more appraisal wells in Reed Bank. The Philippine government issued
the SC 72 exploration permit in 2010.
In 2012, Forum Energy
said 3D seismic surveys performed by independent consultant Count Geophysics
Ltd. in 2006 showed the gas in place is about 21 percent more than the reserves
in nearby Malampaya.
Monsada said these
areas in West Philippine Sea are where Nido and Malampaya had successful undertaking
of oil and natural gas exploration.
“But the Malampaya
extracted oil had so far extracted contained some metals that cannot be
processed by local refineries, so it was sent abroad where they have bigger
refineries, for processing,” she said.
On the other hand, the
natural gas from Malampaya is now being harnessed by three power plants in the
country, in addition to 40 buses plying from Batangas to Metro Manila and vice
versa.
“Hopefully, we can find
more oil from our territories in order to reduce our importation of oil from
other countries,” Monsada said.
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