Duterte OKs resumption of energy projects in West Philippine Sea

MANILA, Philippines — President Duterte has lifted the moratorium on oil and gas explorations in the West Philippine Sea to allow service contractors Forum Energy Ltd. and PXP Energy Corp. to resume their activities in the area, presidential spokesman Harry Roque Jr. said yesterday.

According to Roque, the Chief Executive has approved the Department of Energy’s recommendation to allow the explorations to proceed after these were suspended during the previous administration.

“First, the President has approved the recommendation of the Department of Energy to allow petroleum activities once again and to allow the exploration of natural gas and oil in the West Philippine Sea,” Roque said in Filipino over state-run PTV-4.

Energy Secretary Alfonso Cusi had announced the development on Thursday night, which allows the contractors conducting petroleum-related activities in service contracts 59, 72 and 75 in the West Philippine Sea to proceed.

The Philippine National Oil Co.-Exploration Corp. is operating SC 59 and 72, while PXP Energy Corp. handles the exploration activities at SC 75.

“It is expected that the exploration for oil and natural gas at the West Philippine Sea will proceed. We have one service contractor right now and we are expecting this service contractor, Forum (Energy) Ltd. and PXP Energy Corporation, will continue their work and activities in the West Philippine Sea,” Roque said.

Quoting Cusi, Roque said the activities would be possible since the Philippines has established strong relations with China, which is claiming some portions of the West Philippine Sea.

“Secetary Cusi has said that the exploration for valuable resources at the West Philippine Sea is possible because we have a close friendship with China,” Roque said.

Roque also quoted Cusi as saying: “The oasis of peace that the Philippine Department of Foreign Affairs and the Chinese Ministry of Foreign Affairs envision must also be an oasis of prosperity. For this to happen, the Philippines must restart its economy using the engine of energy resiliency and security.”

“What we have done is a unilateral action on our part, to ask those licensees to start the activities in the West Philippine Sea,” Cusi said at a virtual press conference.

“It is a unilateral action from our part and there is no prohibition in doing that,” he added.?In 2014, the Aquino administration issued a moratorium on all exploration and drilling activities in the West Philippine Sea amid rising geopolitical tensions between the Philippines and China.

Cusi said the lifting of the moratorium is for the country to pursue long-delayed activities that will help it harness available resources in the West Philippine Sea.

He emphasized that this move is not seen to affect the ongoing negotiations between the Philippines and China, and Forum Energy Ltd. and the China National Offshore Corp. under the memorandum of understanding it previously signed for possible joint developments in the future.

“It was done in good faith. It does not stop the joint development activities that we might arrive at with China,” Cusi said.

The energy secretary said the lifting of the moratorium works in line with the government’s efforts to address energy security.

“With the impending depletion of our natural gas reserve in Malampaya, it is the department’s position that there is an urgent imperative to resume exploration, development and production activities within our EEZ (exclusive economic zone) to ensure continuity of supply of indigenous resources in the country,” Cusi said.

Malampaya’s contract is set to expire in 2024. While its gas supply may last even until 2027, Cusi emphasized earlier that this supply might not be enough for future energy requirements, such as the expansion of application of natural gas to other sectors.

Welcome development

Duterte’s decision to lift the moratorium on oil and gas exploration in the West Philippine Sea is a welcome development in the wake of the dwindling supply from the Malampaya reservoir, which accounts for 20 percent of the country’s power supply and almost 30 percent in Luzon, Sen. Sherwin Gatchalian said yesterday.

Gatchalian, who chairs the Senate committee on energy, said the lifting of moratorium will help the country to be energy-sufficient if there are potential sources within the exclusive economic zone that could secure energy supply in the coming years.

“The stalled exploration and appraisal activities in Service Contracts 59, 72 and 75 can now resume and these could be new sources of oil and gas which can secure if not contribute to stabilizing the country’s energy supply,” Gatchalian said.

Former foreign affairs secretary Albert del Rosario welcomed yesterday the President’s decision.

“The PRRD (President Duterte)’s lifting of the moratorium on oil exploration in the West Philippine Sea is, we believe, a constructive move,” Del Rosario said in a statement.

“For as long as we pursue activities with China that is in accordance with Philippine law, this would be a step in the right direction towards a peaceful settlement of disputes,” he said.