Solon urges DOE to restart West PHL Sea gas, oil hunts

A congressman has urged the Department of Energy (DOE) to reactivate the oil and gas exploration ventures in the West Philippine Sea that were temporarily suspended in 2015.

In a statement on Sunday, Surigao del Sur Rep. Johnny Pimentel said deep-water gas exploration of at the WPS should resume since Malampaya, which supplies some 40 percent of Luzon's power demand, might become depleted within the next decade.

The DOE put on hold three offshore oil and gas hunts in Northwest Palawan last year out of respect to the Permanent Court of Arbitration in The Hague that was then hearing the maritime case filed by the Philippine government against China.

The arbitration court eventually ruled in favor of the Philippines, as it invalidated the so-called nine-dash line, China’s basis for claiming almost the entire South China Sea.

The court also ruled that the Panatag Shoal, also referred to as Bajo de Masinloc, is a common fishing ground. The Panatag Shoal is located 124 nautical miles from the nearest point in Zambales.

"It's high time to allow the resumption of the stalled projects, considering the arbitral tribunal's verdict that the areas involved are well within the Philippines' Exclusive Economic Zone, as defined by the United Nations Convention on the Law of the Sea," Pimentel said.

"We expect the DOE to revoke the suspension orders issued against the projects, while the Philippine government pursues strong and effective diplomacy with China," added Pimentel, a member of the House committee on national defense and security.

To date, all oil and gas exploration activities with respect to Service Contracts (SCs) 58, 72 and 75, each covering large blocks in Northwest Palawan, remain suspended.

Of the three projects, SC 72 is widely regarded as the most promising, as it covers the gas-rich Reed Bank, also known as Recto Bank, at the northeast end of the Spratly archipelago.

The Reed Bank is believed to hold the bulk of the West Philippine Sea's estimated 55.1 trillion cubic feet of gas and 5.4 billion barrels of oil reserves, based on a previous study by the U.S. Energy Information Administration.

Pimentel said the Reed Bank's Sampaguita field alone could contain up to 4.6 trillion cubic feet of gas plus some 115 million barrels of oil, much larger than Malampaya's 2.7 trillion cubic feet of gas and 85 million barrels of condensate.

The largest hydrocarbon deposit ever discovered in the Philippines, Malampaya produces 146 billion cubic feet of gas every year. The fuel drives three of Luzon's largest power plants based in Batangas.

SC 72 covers 880,000 hectares and is operated by Forum Energy Plc, with Monte Oro Resources and Energy Inc.

Forum was set to drill two exploratory wells in Reed Bank in August 2015, were it not for the suspension order issued in March that year.

Forum is majority owned by PXP Energy Corp., a Philippine Stock Exchange (PSE)-listed entity, with Tidemark Holdings Ltd. as minority partner.

Monte Oro is a wholly-owned subsidiary of Apex Mining Co. Inc., another PSE-listed entity.

SC 75 covers 616,000 hectares and is run by PXP Energy, with the state-owned PNOC Exploration Corp. and PetroEnergy Resources Corp., another PSE-listed firm, as partners.

SC 58 covers 1.34 million hectares immediately outboard of Malampaya and is operated by Nido Petroleum Ltd., an Australian Securities Exchange-listed entity controlled by Bangchak Petroleum Public Co. Ltd. of Thailand. — Mark Merueñas/BM, GMA News