Manila Bulletin

Duterte lifts mora­to­rium on oil ex­plo­ration in WPS

- By MYRNA M. VE­LASCO Business · Politics · Oil · Energy · Industries · Mining · Fuel · China · Rodrigo Duterte · United States Department of Energy · Davao · Dennis Uy · Manuel V. Pangilinan · Philippines · Beijing · Oil and Gas Mining · Petroleum · CNOOC Limited · China National Heavy Duty Truck Group Company Limited · Philippines Department of Energy · Philippine National Oil Company · China's State Council · Palawan · Repsol

To al­low the en­try of in­vestors in the up­stream pe­tro­leum sec­tor, pri­mar­ily China Na­tional Off­shore Oil Cor­po­ra­tion (CNOOC), Pres­i­dent Ro­drigo Duterte has lifted the mora­to­rium on seis­mic as well as oil and gas drilling ac­tiv­i­ties at the West Philip­pine Sea (WPS), a dis­puted ter­ri­tory.

En­ergy Sec­re­tary Al­fonso G. Cusi an­nounced to the me­dia that the Pres­i­dent “has ap­proved the rec­om­men­da­tion of the Depart­ment of En­ergy (DOE) to lift the sus­pen­sion of pe­tro­leum ac­tiv­i­ties and the re­sump­tion of pe­tro­leum ex­plo­ration in the WPS.”

With the lift­ing of the mora­to­rium, he noted the im­me­di­ate com­pa­nies that will ben­e­fit from it will be CNOOC, the Udenna En­ergy Cor­po­ra­tion of Davao busi­ness­man Den­nis Uy, state-run Philip­pine Na­tional Oil Com­pany-Ex­plo­ration Cor­po­ra­tion (PNOC-EC) as well as PXP En­ergy of busi­ness­man Manuel V. Pangili­nan.

“We need to ex­plore, so we may ad­dress the coun­try’s en­ergy se­cu­rity,” Cusi said; while em­pha­siz­ing that “the lift­ing of the mora­to­rium was ar­rived at in good faith and with full re­gard to the on­go­ing ne­go­ti­a­tions be­tween the Philip­pines and China, and Fo­rum Ltd. and CNOOC.”

In fact, it was Pangili­nan­led’s PXP En­ergy which for­mally pleaded to the DOE on the lift­ing of the ex­plo­ration mora­to­rium way back in 2018, but it took nearly two years for the gov­ern­ment – pri­mar­ily Mala­cañang, to act on it.

With this re­laxed pol­icy, CNOOC’s long planned part­ner­ship with PNOC-EC at Ser­vice Con­tract (SC) 57 within the north­west Palawan basin, can al­ready ad­vance; as well as the tie-up of PNOC-EC with Span­ish firm Rep­sol for SC 59 for a pe­tro­leum block in South­west Palawan.

Uy’s Udenna is con­sid­er­ably a "new en­trant" in oil and gas ex­plo­ration ven­tures in the coun­try, and it just re­cently won bids for two ar­eas to do seis­mic and ex­plo­ration ac­tiv­i­ties at the West Philip­pine Sea.

For the Pangili­nan group, it is tar­get­ing to re­sume ex­tended seis­mic sur­vey and well drilling at the Recto Bank, a block known to be en­dowed with rich gas de­posits that could po­ten­tially match the com­mer­cial scale pro­duc­tion at Malam­paya.

Cus in­di­cated “re­sume-towork no­tices (were) is­sued by the DOE to the ser­vice con­trac­tors do­ing pe­tro­leum-re­lated ac­tiv­i­ties in ar­eas of SC 59, 72 and 75 in the West Philip­pine Sea.”

The en­ergy chief qual­i­fied that the seis­mic and ex­plo­ration ac­tiv­i­ties were sus­pended since 2013, on the ground of force ma­jeure, be­cause of the per­sist­ing diplo­matic ten­sion be­tween the Philip­pines and China at WPS.

Cusi ad­mit­ted that this pol­icy en­force­ment is partly an­chored on the coun­try’s edgy dis­po­si­tion be­cause of the near-term re­source ex­haus­tion of the Malam­paya field; as well as the ex­pi­ra­tion of its ser­vice con­tract in 2024.

“With the im­pend­ing de­ple­tion of our nat­u­ral gas re­serves 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,” the DOE sec­re­tary said.

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