Philippines, China Mull South China Sea Energy Cooperation

Posted by Joseph Keefe
Friday, March 2, 2018
The Philippines on Friday identified two areas in South China Sea where joint exploration for oil and gas may be undertaken with China, including one in territory that both sides have argued over for years.
The two countries have agreed to set up a special panel to work out how they can jointly explore in part of the hotly contested waters without having to address the issue of sovereignty, something experts say would be extremely complex.
Philippine President Rodrigo Duterte's spokesman, Harry Roque, said the areas being considered were sites covered by service contracts 57 and 72, which are exploration permits issued by Manila's energy ministry.
"What I know is that there are two areas being considered for joint exploration, but both are within the exclusive economic zone" of the Philippines, Roque told reporters.
China claims almost the entire South China Sea, believed to rich in energy reserves and marine resources. Brunei, Malaysia, Vietnam and Taiwan also have claims.
The 880,000-hectare SC-72 at the Reed Bank, a disputed area, is where PXP Energy Corp had been undertaking exploration to evaluate the block's gas reserves.
In 2016, the Philippines won a case at the Permanent Court of Arbitration in The Hague, which invalidated China's claim to sovereignty over most of the South China Sea, and also made clear the Reed Bank was inside the Philippines' Exclusive Economic Zone (EEZ). China does not recognise the ruling.
Since Reed Bank is disputed, Roque said "there must be an agreement before the two countries can proceed with the joint exploration".
The Philippine energy ministry suspended exploration in the Reed Bank, known locally as Recto Bank, in late 2014 as the government pursued the arbitration case, disrupting PXP Energy's plan to drill two wells. Chinese boats had in 2011 harassed a survey ship contracted by PXP's unit, Forum Energy.
PXP is eager to resume exploration in the Reed Bank but said any joint venture would likely involve a Chinese company.
PXP had been talking with China National Offshore Oil Corp (CNOOC) about Reed Bank during the administration of Duterte's predecessor, Benigno Aquino, but the arbitration disrupted negotiations.
In September last year, the Philippines said it was pursuing a long-delayed oil and gas exploration project with CNOOC and a Canada-listed company in the SC-57 area, which is outside disputed waters.

The area lies near the country's main oil and gas fields, including Malampaya, Nido, Cadlao and Matinloc.

Reporting by Enrico dela Cruz

Categories: Contracts Energy Finance Government Update Maritime Security Offshore Offshore Energy

Related Stories

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

PTTEP Buys Chevron's Hess Unit Share of Southeast Asia’s Offshore Block for $450M

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project

MODEC and Terra Drone Renew FPSO Drone Inspection Partnership

Current News

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Shelf Drilling Lands New Jack-Up Contract in Vietnam, Extends Egypt Deal

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

Sapura Energy Rebrands to Vantris Energy

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

CNOOC Brings New Offshore Gas Field On Stream

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com