China has expressed its willingness to participate in the search for energy sources in the West Philippine Sea (WPS) after President Rodrigo Duterte decided to lift a suspension on exploration deals in the disputed area.
Foreign Ministry spokesperson Zhao Lijian said China and the Philippines have reached a consensus on joint exploration of oil and gas resources in the contested area.
He said that both countries have agreed to set up relevant consultation and cooperation mechanisms for joint exploration.
“We hope the two sides will work together for new progress in the joint exploration,” according to Zhao.
Mr. Duterte removed the force majeure declaration imposed by his predecessor President Benigno Aquino III on the area of conflict. Aquino had figured in a bitter diplomatic spat with its giant neighbor after refusing bilateral dialogues to settle the dispute.
Instead, Aquino filed a case with the Permanent Court of Arbitration at The Hague that ruled in favor of the Philippines but which was a ruling the government can’t enforce since China did not recognize the proceeding.
The move of the government spurred shares of companies with existing exploration contracts in WPS with the shares of PXP Energy, a unit of Manuel V. Pangilinan’s Philex Mining Corp. and which owns a service contract in the area, surging by 50 percent on Friday.
Its unit Forum, another service contract holder, has been in talks with China National Offshore Oil Corp. over a possible tie-up.
Department of Energy (DoE) Secretary Alfonso Cusi said with the lifting of the drilling ban the tie up is expected to be sealed.
“I am sure they will expedite their talks,” Cusi noted.
PXP and Forum hold Service Contracts 75 and 72, respectively, which cover areas located off the west coast of Palawan.
PXP’s shares on Friday closed at P7.72 per share from P5.15 the previous day.
Service Contract 72, located in the Reed Bank, is the site of the Sampaguita Gas Field, which is estimated to contain about 2.6 trillion cubic feet of contingent gas resources, according to PXP.
“Once the moratorium on SC 72 is lifted, our immediate plan for North Bank (area) is to conduct a 2,600-sq.-kilometer 3D seismic survey to further evaluate the prospect, which could eventually lead to drilling for an exploratory well,” PXP President Daniel Carlos told stockholders early this year.
Service Contract 59, operated by state-run Philippine National Oil Company-Exploration, was also allowed to resume operations
PXP Energy and Roberto Ongpin’s Atok-Big Wedge were Friday’s top gainers.
Atok Big-Wedge of businessman Roberto Ongpin also reaped huge gains on Friday. It has an investment in the London-based firm in SC 72.
Davao City-based billionaire Dennis Uy is Atok Big-Wedge’s vice chairman, after he bought 100 million shares in July 2019.
Enrique K. Razon Jr.’s Apex Mining, which also has interests in SC 72, went up by almost 35 percent.
Despite the weak market last week, energy firms defied the trend:
Forum Pacific was up 27.4 percent; Philex Mining, 20.8 percent; Philodrill Corp, 13.8 percent; Oriental Petroleum and Minerals, 13.1 percent; Petroenergy Resources, 11.8 percent; ACE Exenor, 11.6 percent and Abra Mining and Industrial, 10 percent.
Overall, companies comprising the mining and oil sub-index grew by almost 11 percent in contrast to the Philippine Stock Exchange index which dropped by 0.7 percent.