Philippines: Drilling for oil in disputed sea may resume

Philippines: Drilling for oil in disputed sea may resume

Drilling for oil and natural gas on the Reed Bank in the South China Sea may
resume before the end of the year, a Philippine energy official said on
Wednesday, as the government prepares to offer new blocks to investors in
bidding in December.

The Philippines suspended exploration at the Reed Bank, which it calls Recto
Bank, in late 2014, as it pursued international arbitration over territorial
disputes.

The bank is in waters claimed by China.

Ismael Ocampo, director at the Department of Energy's Resource Development
Bureau, told reporters the agency expected the suspension to be lifted in
December.

He said a directive from the Department of Foreign Affairs directing the
Department of Energy to resume oil and gas exploration in the South China
Sea was already in the works.

China claims almost the entire South China Sea, where about $5 trillion
worth of sea-borne goods pass every year. Brunei, Malaysia, the Philippines,
Vietnam and Taiwan also have claims.

Exactly a year ago, the Permanent Court of Arbitration in The Hague
invalidated China's claim to sovereignty over most of the South China Sea.

The ruling, which China refused to recognise, clarified Philippine sovereign
rights in its 200-mile Exclusive Economic Zone to access offshore oil and
gas fields, including the Reed Bank, 85 nautical miles off its coast.

"We will try to conduct seismic activities," in the disputed waters, Mr
Ocampo said, hopeful that China would not complain and harass crews of
survey ships to be deployed.

In 2011, Chinese patrol vessels almost rammed a survey ship at the Reed Bank
contracted by a PXP Energy Corp unit.

President Rodrigo Duterte, who took power shortly before the Hague ruled in
favour of Manila, has said he would raise the landmark ruling with China
eventually, but he first needed to strengthen relations between the two
countries.

Mr Duterte, who has been cool towards old ally the United States, hopes
closer ties with China will yield billions of dollars in loans and
investment in infrastructure, the backbone of his economic agenda.

PXP Energy Chairman Manuel Pangilinan said in March he was optimistic his
company's exploration project at Reed Bank would soon resume, citing the
warming ties with China.

The Philippines, which relies overwhelmingly on imports to fuel its
fast-growing economy, is under pressure to develop indigenous energy
resources. Its main source of natural gas, the Malampaya field near the
disputed waters, is due to run out in less a decade.

PXP's Reed Bank prospect has indicated natural gas yield potential.

More than two dozen oil, gas and coal blocks, including additional areas in
disputed waters, may be offered during the December bidding, Mr Ocampo said.

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Link to Original Article:
http://www.bangkokpost.com/news/asean/1285874/philippines-drilling-for-oil-i
n-disputed-sea-may-resume

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com