August 16, 2017 By Victor V. Saulon, Sub-Editor
PXP Energy Corp. had talks “fairly
recently” with counterparts in China ahead of the lifting of a moratorium on
oil exploration in the West Philippine Sea, the chairman of the company said on
Monday.
“Mukhang mas (It looks more)
hopeful based on the statements made by the government, principally [Foreign]
Sec. [Allan Peter S.] Cayetano. Hopefully we could push it forward,” PXP Energy
Chairman Manuel V. Pangilinan told reporters on the sidelines of Tuesday’s
signing of a joint venture between a firm that he also chairs and a local water
district.
He was referring to the secretary’s
pronouncements that the country would have a more open relationship with China
”that sets the more friendly context” under which the company should be able to
push the discussions forward.
He declined to say when the
discussions took place or whether these were with the Chinese government or
with China National Offshore Oil Corp. (CNOOC), the company that PXP Energy and
its partners had initially held talks with.
“These are ongoing [talks]. It’s
good to keep [these] under wraps,” Mr. Pangilinan said. “Let’s leave it at
that. These are very private discussions.”
“The first step for us is, there’s a
moratorium, right? So we cannot do anything in the concession area. So the
first order of the day is to lift the moratorium,” he said. “But even if the
moratorium is lifted, can we send our boats there and oil rig. We have to talk
to the Chinese.”
He confirmed that his group had
talks with Chinese counterparts, and described the tone of the discussions as
“good, positive.”
Mr. Pangilinan’s comments come after
the Department of Energy (DoE) said a new contracting round was planned for
petroleum and coal as it hopes to create wealth for the industry to fund more
energy development projects.
Last month, DoE officials said they
were targeting December as the launch of the contracting round, the sixth time
that the department will be holding a transparent and competitive system of
awarding service contracts for petroleum and coal prospective areas. The move
is hoped to result in the discovery of new energy reserves.
The department said the areas to be
offered include parts of the West Philippine Sea, Sulu sea and areas around
Palawan island. In the fifth round, the DoE offered 11 areas with a total scope
of about 4.8 million hectares.
PXP Energy directly and indirectly owns
77.5% of Forum Energy Ltd., a London-listed company whose main asset is a
controlling interest in offshore exploration Service Contract (SC) 72 west of
Palawan island in the disputed seas. SC 72 is covered by the decision handed
down by the Permanent Court of Arbitration in The Hague in the Netherlands on
July 12, 2016.
The court ruled that Reed Bank,
where SC 72 lies, is within the Philippines’ exclusive economic zone as defined
under United Nations Convention on the Law of the Sea.
On March 2, 2015, the DoE placed SC
72 under force majeure because the contract area falls within the disputed
area, which was the subject of the arbitration process.
Under the terms of the force
majeure, exploration work at SC 72 is suspended from Dec. 15, 2014 until the DoE
notifies Forum Energy that it may continue drilling.
The Philippines is pressed to find
new natural gas reserves as the Malampaya field off Palawan island is expected
to begin running out by around 2022 to 2024. The natural gas project is said to
deliver up to 20% of the country’s electricity requirements.
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