Duterte lifts suspension of oil exploration in West PH Sea

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Metro Manila (CNN Philippines, October 15) — President Rodrigo Duterte has approved the lifting of the moratorium on oil and gas exploration in the West Philippine Sea, the Department of Energy announced on Thursday.

This move paves the way for the resumption of drilling activities in the disputed waters, as well as the planned joint exploration with China.

Energy Secretary Alfonso Cusi said in a statement that the President approved the department’s recommendation “so we may address the country’s energy security,” especially with the impending depletion of the Malampaya natural gas field.

Cusi said a “resume-to-work" notice has already been issued to contractors of Service Contract 59 in West Balabac, Palawan, Service Contract 72 which covers Recto Bank, also known as Reed Bank, and Service Contract 75 in Northwest Palawan. These are operated by the Philippine National Oil Company - Exploration Corporation, Forum Ltd., and PXP Energy Corp., respectively.

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Cusi said the lifting of the moratorium was done “in good faith,” taking into consideration the ongoing negotiations between the Philippines and China for the joint oil and gas exploration in disputed areas. The two countries have already appointed members of the inter-governmental steering committee that would supervise these projects, but no areas have been specified.

The Philippines earlier offered for oil exploration an area in Recto Bank, considered to be an oil-rich sea feature in the West Philippine Sea that China claims as part of its territorial waters. The arbitral ruling, which China rejects, says Reed Bank is part of the Philippines' exclusive economic zone and contintental shelf, where Manila has exclusive sovereign rights.

It has been eyed as a possible replacement for Malampaya, whose natural gas deposits are expected to run out in ten years. Malampaya accounts for 20 percent of the country's power supply.

The Recto Bank exploration had been put on hold following a 2012 presidential order freezing all exploration activities in disputed areas. It was issued by then President Benigno Aquino III amid rising tensions with China.

The memorandum of understanding between the Philippines and China for the joint exploration states that all negotiations done under the agreement "will be without prejudice to the respective legal positions of both governments."

Beijing had appointed the state-owned China National Offshore Oil Corporation  as its representative in all working groups. The Philippines, on the other hand, will assign the company that has an existing service contract with the government in the areas of joint exploration, which have yet to be determined. If there are no such enterprises, the Philippine National Oil Company - Exploration Corporation will represent the country.

Cusi said he has also informed Foreign Affairs Secretary Teodoro “Teddy Boy” Locsin, Jr. of the President’s decision. Duterte earlier said his administration will set aside the country's arbitration win in The Hague to make way for the joint exploration with China.

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