Tensions with China costing PH energy investments — DOE
MANILA, Philippines — As China continues to encroach on Philippine waters, territorial tensions have cost Manila potential energy investors, according to Energy Secretary Sharon Garin.
In a press conference on Tuesday, July 15, Garin was asked for other potential sources of natural gas other than Malampaya, the country’s sole native source for natural gas. Projections say that its supplies will be depleted by 2027.
The Philippines is set to conclude a $893-million drilling project in the Malampaya gas fields in 2025, with hopes of finding more natural gas reserves.
Should Malampaya reserves prove insufficient after the drilling project, Garin said the Philippines could potentially rely on importation and renewable energies.
However, exploration for new gas reserves is costly, with Garin citing an estimated $43 billion as a sample figure. She said potential investors include companies from Australia, Israel, the United States and the United Arab Emirates.
“They’re very interested in the Philippines. I think, they saw that it was a good investment opportunity, not just the opportunity but our climate is the right time for them to come in. So they saw that we have the right policies and leadership to invest $43 billion,” Garin said in a mix of English and Filipino.
It is this high cost of investment that dissuades investors from potential conflict areas such as the West Philippine Sea—an area believed to be rich in natural gas reserves.
Garin said areas like Reed Bank, located in the West Philippine Sea, have already been offered to potential investors.
“We have offered those areas but there are no takers. So, I don’t think the investors would risk it,” Garin said.
No investor would risk billions of pesos if their security isn't guaranteed, Garin explained.
Even the Malampaya gas field, which is located just 80 kilometers off the coast of Palawan, is still under the watch of the Philippine Coast Guard, with the Department of National Defense also regularly briefed on its activities.
Garin cited a service contract within the West Philippine Sea that had to be suspended due to tensions with China.
In 2022, then-Energy Secretary Raphael Lotilla approved a declaration of force majeure for Service Contracts 75 and 72, relieving the contractors of their obligations.
The “force” in this case? The ongoing maritime dispute in the West Philippine Sea.
Despite the 2016 ruling by the Permanent Court of Arbitration in favor of the Philippines, China continues to assert its sweeping claims over the contested waters.
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