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

Aker Solutions, PTAS JV Hooks Brownfield Services Extension off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

Valeura Concludes Eight-Well Drilling Campaign in Gulf of Thailand

BW Opal FPSO Vessel set for Work off Australia

ABS Greenlights SHI’s Multi-Purpose Deepwater LNG Floating Unit

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Marine Masters Secures Wellhead Platforms Installation Job Off India

Current News

MODEC, Carbon Clean to Advance FPSO-Mounted Carbon Capture Tech

Aker Solutions, PTAS JV Hooks Brownfield Services Extension off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

TPAO, SOCAR and BP to Ink Caspian Sea Oil and Gas Production Deal

Fugro Lands Deepwater Gas Field Job in Southeast Asia

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

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