Two oil exploration contracts in a joint venture between local and Chinese firms outside the disputed West Philippine Sea (WPS) is waiting for President Rodrigo Duterte’s signature to start.
Energy Secretary Alfonso Cusi said one of the joint exploration projects likely to be signed anytime soon is with China state-owned oil company China National Offshore Oil Corp (CNOOC).
“There are two. If I remember, Service Contract 57 (SC 57). This service contract is owned by PNOC-EC and they needed a partner to pursue further exploration when the time comes.
They have been looking for partners and one partner that has shown interest is CNOOC,” Cusi bared during a Palace briefing.
The state-owned Philippine National Oil Co.-Exploration Corp. (PNOC-EC) is a government-run corporation. It was awarded SC 57 back in September 2005 which allowed it to carry out petroleum exploration west of the Calamian Islands, an area northwest of Palawan.
The deal covers a total area of 7,120 square kilometers (sq. km.) some 50 kilometers northwest of the tip of Busuanga Island.
Noy’s EO needs amending
Cusi indicated CNOOC submitted the “best proposal” but its partnership with PNOC-EC was hindered from moving forward due to an amendment needed to an Executive Order (EO) issued by the previous administration turning down the farm-in agreements among involved firms.
The Department of Foreign Affairs (DFA), however, is moving to have the exploration moratorium lifted.
“The issue of the lifting is being taken care of by the DFA because of the diplomatic issue. As far as the Department of Energy is concerned, for us to resume exploration, we need to lift that moratorium,” he said.
A 2006 farm-in agreement among the three firms states that CNOOC has a majority stake of the shares at 51 percent, PNOC-EC with 28 percent and another partner, Jadestone Energy Inc (formerly Mitra Energy Ltd.) of Malaysia, with 21 percent.
“As I explained earlier, SC 57 is owned by PNOC-EC and they needed a partner to pursue the work. And I think the best proposal is coming from CNOOC and PNOC-EC. They cannot continue the agreement or the acceptance of CNOOC proposal until that EO is amended,” Cusi noted.
Regarding the other joint exploration deal, Cusi deferred giving more information, admitting he could not recall the details. He, however, said with certainty that is not Service Contract 72 (SC 72) since this agreement involves part of the disputed territorial waters being claimed by China.
No signing details yet
Cusi also did not confirm if the said deals will be signed in time for Chinese President Xi Jinping’s forthcoming visit to Manila.
“I don’t like to preempt what will be the discussion during the visit of President Xi Jinping and the topics are being taken care of by DFA,” he said.
The immediate development of oil fields in the contested areas seeks to take advantage of high crude oil prices.
“We are very dependent on what is happening in the international market. So our information is based on the forecast of the developing, producing and exporting countries,” he added.
“The forecast for the coming months said (oil prices) would remain at the 70 level—I mean, low 70s and the high 70s per barrel,” he said.