Published
May 24, 2017, 10:00 PM By Cecilia Yap
One of the most
prominent tycoons in the Philippines is increasingly optimistic that President
Rodrigo Duterte can strike a deal with China to share oil and gas deposits in a
disputed part of the West Philippine Sea (WPS) or South China Sea to China.
“At some point a
commercial deal will be made that will enable us to develop the prospect,”
Roberto Ongpin, whose company Atok-Big Wedge Co., Inc. holds a minority
stake in a gas field in the South China Sea, said in an interview. “It will be
astronomical.”
Since taking power last
year, Duterte has sought to improve ties with China that deteriorated under
predecessor Benigno Aquino. The two countries agreed to work out “mutually
acceptable approaches” to the South China Sea at formal talks that began last
week, an early step toward reaching a deal to exploit what may be the
Philippines’s largest gas field.
Ongpin has a history
with Duterte: He was forced to sell his Philippine gaming assets after the
president targeted him in a crackdown on online gaming. Still, Ongpin said he
believes the Philippine leader’s approach toward the world’s second-biggest
economy is moving in right direction.
“There’s no way you can
bump heads with China,” he said by phone.
Ongpin said his company
now owns 20 percent of Forum Energy Ltd., which has a 70 percent stake in the
Sampaguita gas field west of the Philippines’ Palawan province. The discovery
is estimated to contain 11.4 trillion cubic feet of natural gas, according to a
third-party assessment commissioned by PXP Energy Corp. PXP which owns 80
percent of Forum.
Atok-Big Wedge shares
rose 3.2 percent as of the noon break in Manila, poised for its biggest gain
since May 11. The stock has risen 29 percent this year against the benchmark
Philippine stock index’s 14 percent advance.
That’s more than four
times the 2.7 trillion cubic feet of reserves in Malampaya gas field, the
largest in the Philippines, which currently fuels several power plants and
generated hundreds of billions of pesos worth of royalties for the government.
Supply from the Malampaya gas field will last only until 2024, prompting the
Energy Department to consider importing liquefied natural gas to ensure stable
supplies.
In dealings with
President Xi Jinping, Duterte has set aside an international court ruling last
July that said China had no historic rights to the resources in waters claimed
by the Philippines. The case was brought by Aquino’s administration, which had criticized
a deal in the 2000s between the Philippines, China, and Vietnam to cooperate on
energy exploration across a large swath of disputed waters.
Still, many obstacles
remain.
War talk
In a speech last
Friday, Duterte said that Xi had threatened to go to war with the Philippines
after he expressed an intention to unilaterally drill for oil in disputed areas
of the South China Sea during an unspecified meeting. Duterte’s new Foreign
Secretary Alan Peter Cayetano walked back the comments on Monday, telling
reporters that Duterte made the statement in reaction to domestic critics.
Duterte’s opponents say
his overtures to China have undermined the Philippines’s territorial claims and
left the country with little room to maneuver.
China foreign ministry
spokeswoman Hua Chunying declined to comment on Xi’s meeting with Duterte, and
said disputes should be resolved through dialogue and negotiation. “Pending
final settlement, we advocate shelving the dispute for common development,” Hua
said.
China has previously
sought to disrupt Philippine attempts to exploit the resources. In 2011, a
Chinese surveillance vessel chased away a survey ship doing work for Forum
Energy.
PXP Energy Chairman
Manuel Pangilinan said on May 19 that his group is awaiting the outcome of the
bilateral talks between the Philippines and China, adding that a code of
conduct in the South China Sea would be key to proceeding with any development.
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