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Cusi: Gov’t will protect oil and gas resources

Only the Philippine government, through the DoE, may issue licenses to drill in Philippine land territory, including its islands, internal waters, territorial sea, exclusive economic zone, and continental shelf

Maria Romero



The government is ready to “take necessary steps” to protect the oil and gas resources in the West Philippine Sea (WPS) amid Chinese occupancy of the area.

“The Philippines remains in business, Covid-19 and China, notwithstanding,” Department of Energy (DoE) Secretary Alfonso G. Cusi said Wednesday.

“Should any foreign state engage in petroleum activities inside the Philippine petroleum jurisdiction, the DoE shall take the necessary steps to protect our licensees and preserve our resources,” he said.

Cusi also said the DoE will “defer to the sole prerogative of the President regarding any security option” in asserting the exclusive licensing authority of the country over petroleum and other resources in the seabed and subsoil of the WPS.

“It shall also conform to any decision that the Department of Foreign Affairs might take regarding the ongoing informal negotiations on oil and gas cooperation with China,” he added.

Under the law, only the Philippine government, through the DoE, may issue licenses to drill in Philippine land territory, including its islands, internal waters, territorial sea, exclusive economic zone (EEZ), and continental shelf.

Cusi said the DoE continues to develop the uncontested Philippine EEZ and continental shelf through the resumption of petroleum operations by Philippine licensees and the award of new petroleum areas.

In October 2020, the DoE lifted the moratorium on the exploration activities in the WPS, which is anticipated to rake in an initial investment of $25 million by service contractors.

Apart from that, $78-million worth of remaining minimum investments from the service contractors could also be raised.

The latest data from the DoE showed that there are about 6,048 million barrels of oil (MMBO) and 7,108 billion cubic feet of natural gas (BCF) of undiscovered resources in the WPS.

That was on top of the 155 MMBO and 5,050 BCF already discovered before the enforcement of force majeure during the Aquino administration.

On Monday, President Rodrigo Duterte vowed to send warships to the WPS to drill for oil and other minerals should China begin to explore the area’s natural resources.

It was the first time Duterte spoke about the WPS after a three-month standoff with more than 200 Chinese militia boats that refused the leave the Philippine waters since amassing there in December last year.

Duterte assured the public that he would send Philippine ships in the waters to stake a claim on the area where China has put a strong presence with infrastructures on the Philippine-owned Bajo de Masinloc, Subi Reef, and the Mischief Reef.

China had earlier assured that it will not militarize the disputed area. These infrastructures, however, included airstrips and military facilities and had been visited many times by the Chinese military.

The three areas are within the Philippines’ EEZ and were featured in the 1734 Velarde map against China’s recently devised nine-dash line claim.

The United Nations Convention on the Law of the Sea (UNCLOS) concluded that China’s historic rights claim over the maritime areas inside the “nine-dash line” has no lawful effect if it exceeds what’s entitled to on 12 July 2016. It was rejected by China and Taiwan.

The Chinese flotilla scattered last week when the United States sent powerful American ships and their air and submarine support to accompany two Philippines ships in reclaiming control of the area.

The development followed the two diplomatic protests filed by Foreign Affairs Secretary Teodoro Locsin at the China Embassy while Defense Secretary Delfin Lorenzana demanded that the Chinese ships leave the Philippine waters.

Presidential spokesperson Secretary Roque, meanwhile, claimed that the Chief Executive is dealing with China using “silent diplomacy”.

“When we start to mine, when we start to get whatever it is that is in the bowels of the China Sea (West Philippine Sea)… our oil, I’ll be there, but by that time I will send my ships there,” Duterte said.

“I will send my grace ships to state a claim. You can be assured. If they get oil, nickel, and precious stones, that would be the time we should act on it,” the President added.

In 2019, Duterte said he would push for a joint exploration of natural resources with Beijing in the WPS for as long as Manila gets the bigger share.

“If they start drilling, I’ll ask them ‘is that part of our agreement?’ Because if it is not part of our agreement, if you start to drill oil there, I will also drill my oil there,’” he stated.

In the same speech, he admitted that he was not inclined to assert the country’s jurisdiction in the area for now.

Duterte also defended his silence over the presence of the Chinese ships within the Philippines’ exclusive economic zone, saying the country can only reclaim China-occupied areas in the West Philippine Sea by force and with bloodshed.

“If we go there, really to find out and to assert jurisdiction, it would be bloody. It would result in violence that maybe we cannot win,” he said.

“The issue of the West Philippine Sea remains a question forever until such time that we can take it back. There’s no other way but war,” Duterte added.

Philippine National Oil Company-Exploration Corporation (PNOC-EC) president and CEO Rozzano D. Briguez previously underscored that “tapping the West Philippine Sea is beneficial to our country”.

The statement was made as the power sources in the Malampaya natural gas project are anticipated to decline in the next years amid a spiking demand.

The energy sector plays in the promotion of sustainability and socio-economic development, Briguez said, and the government needs to accelerate the development of a new energy supply.

He also reiterated that the government should support the study of the country’s sedimentary basins.

“We have to ensure that sedimentary basins are well studied. It’s part of the plan because don’t study our 16 basins that much. This is what we have to do to entice more investors in the energy sector,” Briguez said.

The state-run PNOC-EC, along with the DoE and the University of the Philippines (UP), is currently conducting an extensive study to make the country’s 16 sedimentary basins marketable for oil and gas exploration.

The geophysical and geological study on the country’s 16 sedimentary basins aims to attract new investments to boost exploration in the development of hydrocarbon resources.

Briguez said the study is vital to both domestic and foreign investors who make business decisions on the viability of the exploration.

To ensure the security and protection of the WPS, the National Task Force for the West Philippine Sea through its spokesperson Assistant Secretary Omar Romero, disclosed sending sovereignty patrols in the disputed sea lanes.

The Area Task Force-West, it said, will maintain nine island detachments in the Municipality of Kalayaan with the biggest contingent at Pag-Asa Islands. ATF-West, meanwhile, will cover the Malampaya gas field and the resource-rich Recto Bank.

Bajo de Masinloc, the islands north of Cagayan, Batanes Province, and the Philippine Rise will be under the protection of the ATF-North.

The Department of Transportation has also constructed a P1.1-B sheltered port and beaching ramp in Pag-Asa while the Philippine Air Force is overseeing the rehabilitation of its airstrip.

The Department of Information and Communications Technology is in the process of providing free WiFi Internet across the islands.

Five lighthouses have been built in Pag-Asa, Patag, Panata, Parola, and Likas Islands.