Racing against time

There is no reason why the Department of Energy (DOE) should not lift immediately the moratorium on oil exploration in the Recto Bank in the West Philippine Sea.

The moratorium is supposed to cover the Recto Bank concession or Service Contract 72 (SC 72), which falls within the contested area of the West Philippine Sea. The moratorium, which was triggered by a force majeure, was imposed by the DOE effective Dec. 15, 2014 and remains in place until the DFA notifies the affected parties that they can commence drilling.

The force majeure pertains to the 2013 case by Manila against Beijing before the Permanent Court of Arbitration at The Hague which was decided in favor of the Philippines in 2016. Among others, the arbitration court ruled that Reed (Recto) Bank, where SC 72 lies, is within the Philippines’ exclusive economic zone as defined under the United Nations Convention on the Law of the Sea. 

Two recent developments support the moratorium’s lifting. First, the DOE has recommended to the DFA the lifting in response to the request of Forum GSEC. PXP Energy (formerly Philex Petroleum) holds a 78.98 percent interest in Forum Energy, which,  in turn,  has a 70 percent stake in SC 72 through its wholly-owned subsidiary Forum GSEC.

Second, following the signing of the MOU between the Philippines and China on joint oil and gas exploration during the state visit of Chinese President Xi Jinping, Cusi opened communications with China’s National Energy Commission, which is the DOE’s counterpart.

Cusi said he is still waiting for China’s reply, but he is targeting a one-year timeline for both countries to come up with a legally binding framework that would guide joint gas and oil exploration activities in the disputed waters. He also revealed that besides PXP Energy, the state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) is also eyeing exploration work in the West Philippine Sea.

Underscoring the urgency of beefing up the country’s energy resources as demand continues to rise, Cusi announced that the DOE has opened to interested investors 14 prospective petroleum areas for exploration under the Philippine Conventional Energy Contracting Program (PCECP). All these areas are within the Philippines’ EEZ and covers onshore and offshore blocks in Luzon and Mindanao.

Forum GSEC, in its letter to  Cusi calling for the lifting of the force majeure moratorium on SC 72, said the lifting of the moratorium would not only be a positive development for its SC 72 block but also for the country because it would allow Forum and another company with a stake in SC 72 – Monte de Oro – to resume exploration and appraisal activities in the area, which include the drilling of two appraisal wells on their Sampaguita gas discovery.

According to Forum, the discovery has  a potential to contain approximately 2.5 trillion cubic feet of recoverable gas which should serve as replacement for Malampaya, which is expected to start a decline in production by 2022.

However, the development of SC 72 must commence not later than 2027 as it would take at least six years from start to first gas, Forum GSEC country representative Daniel Stephen Carlos said.

Forum and Monte de Oro will spend at least $80-to $100-million in the next two to three years to fully appraise the Sampaguita gas field and other identified prospects within its contract area.

Government should waste no time in lifting the force majeure moratorium on SC 72.  The work done in this area is already in the advanced stages compared to the activities that have yet to commence in the 14 petroleum contracting blocks recently opened by the DOE to investors.

The energy chief has made it clear that the Philippine government will sustain PD 87 or the Philippine Oil and Gas Law when it comes to propounded royalty sharing,  if and when drilling of oil or gas with China turns out to be commercially viable. Moreover, the MOU itself states that it was drawn up in the context of UNCLOS and the 2002 Declaration on the Conduct of Parties in the South China Sea and positive dialogue between the two countries.

Even Supreme Court Senior Associate Justice Antonio Carpio has found nothing wrong with the MOU, given that it has enough safeguards to protect the Philippines’ sovereignty.

As noted by PXP Energy’s Manny V. Pangilinan, the MOU  is a “small but significant step” in advancing the development of carbon resources there. 

Tension at the Fort

When it was completed in 2001, Pacific Plaza Towers set the standard for high-end condominium living not just in Bonifacio Global City but in the whole metro.

Recently however, the condo community has been shaken by attacks from certain individuals who were once trusted members of the property management operations.

In 2017, an audit by the Pacific Plaza Towers management revealed a illegal activities by employees and manpower agency workers in the property management’s technical group. Code of conduct violations ranged from theft and pilferage of supplies to gambling during work.

Administrative charges were filed against some regular employees, while the contract with the manpower services provider was not renewed. But the persons involved banded together and decided to sabotage condo operations in defiance.

Last year, the tower pumps in the towers were said to have been deliberately cut off and the individuals abandoned work and started a picket in front of Pacific Plaza Towers.

They also made unfounded charges of labor-only contractualization and displaying defaced photos of the condo board members in their placards, all in an attempt to threaten and damage the reputation of management for simply doing its job.

The picket has been going on for almost six months now without much of a peep from the Bonifacio Global City Estate Association (BGCEA). While Pacific Plaza Towers continues to dutifully pay its estate association dues, BGCEA has done nothing to help resolve the situation.

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