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THE Department of Energy (DOE) said at the weekend that it continues to hold talks with existing service contract holders for exploration activities despite the termination of joint oil and gas negotiations with China.
“The DOE firmly stands for the assertion of Philippine sovereign rights through the promotion of exploration in the WPS [West Philippine Sea]. Following the SJPCC’s [Security, Justice, and Peace Cabinet Cluster] suspension order and now with the termination of negotiations with China, the DOE, in coordination with the SJPCC for safety and security concerns, continues to pursue talks with existing service contract holders so they can proceed with their work programs,” a statement from the office of Energy Secretary Alfonso Cusi said.
Last Thursday, outgoing Foreign Affairs Secretary Teodoro L. Locsin Jr. announced the termination.
The agency, which has been designated as the Co-Vice Chair in the Inter-Governmental Joint Steering Committee (IGJSC), said it firmly stands for asserting Philippine sovereign rights through the promotion of exploration in the WPS.
The IGJSC serves as the official negotiating forum between China and the Philippines. The committee members met only once in October 2019.
“The IGJSC convened only once on October 28, 2019 and no agreement was reached during said meeting,” said the DOE.
Despite this, the DOE said it doggedly promoted exploration in the WPS through the Philippine Conventional Energy Contracting Program, where it opened areas for application and nomination, reviewed bids, and issued licenses.
Moreover, the agency lifted the moratorium on all gas exploration activities in the WPS in October 2020. This, it pointed out, was an exercise in foresight given the current global energy crisis.
The DOE said the lifting of the moratorium encouraged Service Contract (SC) holders to restart investments in WPS exploration. Specifically, SC No. 72 and SC No. 75 contracted survey vessels to carry out exploration activities in Recto Bank.
SC 72 is operated by Forum GSEC 101 Ltd., a 79.13-percent subsidiary of Pangilinan-led upstream oil and gas firm PXP Energy Corp.’s unit Forum Energy Ltd., with a 70-percent participating interest. PXP has a total economic interest of 54.36 percent in SC 72.
SC 75 in northwest Palawan is directly operated by PXP Energy. It has a 50-percent participating interest.
“On the DOE’s part, to ensure the safety and security of our oil and gas activities in the WPS, it held 11 meetings and briefings with all concerned service contractors together with maritime law enforcement and security experts in the National Task Force for the West Philippine Sea,” the DOE added.
However, the SJPCC suspended WPS oil and gas activities in March of this year. “Among the reasons for the suspension was China’s harassment of the survey vessels hired by our service contractors. At that time, the negotiations with China were also cited as another reason for the suspension,” said the DOE.
PXP President Daniel Stephen Carlos earlier said despite the termination, the company remains a partner of government in developing indigenous petroleum resources in the country.
“We will continue to coordinate with the DOE on this, especially in light of the incoming administration. Meanwhile, we aim to enhance the company’s value through the acquisition of new prospective areas and we’ll likewise remain open to evaluate the other opportunities in the region,” Carlos said.
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