Manila Bulletin

Duterte lifts moratorium on oil exploratio­n in WPS


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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