MVP welcomes formation of West Philippine Sea panel

MANILA, Philippines — Tycoon Manuel V. Pangilinan welcomed the formation of a special panel, which he said would hopefully pave the way for joint exploration in the disputed West Philippine Sea.

In a speech last week at the 36th Joint Meeting of the Economic Cooperation Committee of the Philippines and Japan, Pangilinan said the disputed area has the potential to become the next Malampaya deep water gas-to-power project, which is estimated to be depleted by 2022.

“We really need to find replacement now…So it’s important to develop gas deposits in the West Philippine Sea, now if not yesterday,” Pangilinan said.

He said the formation of a special panel is a welcome effort.

“We’re glad a bipartisan panel has been formed between the Philippines and China to look into how we can find a more orderly arrangement in exploring gas,” Pangilinan said.

Pangilinan said his group has already conducted surveys, but the efforts have not moved forward because of the territorial dispute.

London-listed Forum Energy plc., a unit of Pangilinan-led Philex Petroleum Corp. holds the license for Service Contract 72, which covers Recto Bank in the West Philippine Sea. It earlier received the green light from the Department of Energy to conduct a drilling survey in a petroleum exploration area, but the department issued a moratorium later on.

Phoenix Petroleum holds a 60.45 percent in Forum, which holds a 70 percent operating interest in SC72, which is located in the West Philippine Sea.

In August 2012, the energy department issued a moratorium on all exploration and drilling works in the area due to ongoing territorial dispute with China, prompting the company to seek an extension of the work program.

The energy department earlier extended Forum’s exploration license by another year, or from August 2015 to August 2016 due to delays in the work program.

The Recto Bank area is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.

Monte Oro Resources and Energy Inc. holds the remaining 30 percent stake in the service contract.

Pangilinan said that while waiting for the solution on the West Philippine Sea dispute, the government should look for other sources of power such as LNG. Otherwise, he said, the country may suffer from manual load dropping or inadequate power, in the next few years.

“In the meantime it would be good for the Philippines to build an LNG facility,” he said.

LNG is natural gas that has been converted into liquid for ease of storage or transport.