DoE to hold talks with China on exploration in disputed sea

THE DEPARTMENT of Energy (DoE) is looking at including the existing ban on oil and gas exploration in the South China Sea in bilateral talks with its Chinese counterpart this week, its top official said.

“We are still studying the ways we are going to lift the moratorium order, but I don’t like to create any speculation. We have not reached any agreement yet,” DoE Secretary Alfonso G. Cusi told reporters on Wednesday on the sidelines of the 35th ASEAN Ministers on Energy Meeting in Pasay City.

Asked whether the moratorium would be part of the discussions among member states of the Association of Southeast Asian Nations (ASEAN), Mr. Cusi said: “No, that’s not part of the agenda of ASEAN meeting, but we could take it up in our bilateral discussion with China.”

Separately, DoE Undersecretary Donato D. Marcos said the bilateral talks with China would cover not just service contracts in the disputed waters but also those wherein a favored foreign investor could “farm in.”

Of the pending oil exploration service contracts, he said Service Contract (SC) 57 is likely to proceed first. “We have SC 57. That is already in the Office of the President. So that we can pursue its exploration work,” Mr. Marcos said, adding that the DoE has finished the documentation and contract for President Rodrigo R. Duterte’s signature.

“It’s within the Philippine territory,” he said of that project.

Located offshore northwest Palawan, SC 57 was awarded to PNOC Exploration Corp. in September 2005.

China National Offshore Oil Co. International Ltd. acquired 51% participating interest in the contract in April 2006, while Mitra Energy Ltd. acquired 21%. Its deed of assignment remained pending with the Office of the President.

SC 57 is currently under force majeure although exploration activities are expected to resume once approval is granted.

Mr. Marcos said service contracts 58, 63, 72 and 75 are within the disputed areas and remain a sensitive issue for the claimant countries. But he said he was hopeful of a resolution.

“We have a very strong relationship with China,” he said.