Gov’t to pursue development of oil resources in S China Sea

The government is pursuing the development of the country’s oil resources in the Spratly’s area, a top energy official said over the weekend.

Energy Secretary Vincent S. Perez said they are currently talking with some oil firms on the possible oil exploration in the South China Sea where the disputed Spratly’s island is located.

"Those are still discussions between two national oil companies, so there are still no developments there. What we’re trying to do is to create some confidence building in the South China Sea. Two national oil companies are in talks," Perez said.

Perez pointed out that it was not yet determined if Spratly’s island will be included in the oil firms’ discussions. "I’d like to also put things in perspective. PNOC is in discussions with other regional national oil companies. PTT of Thailand, Petronas, Pertamina of Indonesia and China National Offshore Oil Co.

"So I don’t wanna highlight one particular discussion over the other because all other discussions have unique strategic value," he added.

Perez said state-owned PNOC-Exploration Corp. (EC) is spearheading the discussions with its counterparts in the region namely, China National Offshore Oil Co. (CNOOC), Pertamina of Indonesia, and Petronas of Malaysia. These three oil firms are also government-run like EC.

"With Pertamina, we’re talking to them about possibly supplying natural gas if it turns out that our Malampaya is not sufficient. In Petronas, they have an excellent track record in developing natural gas, pipelines, pooling districts for shopping malls using natural gas and they actually sent a few CNG (compressed natural gas) pilot taxis here," he said.

"We should recognize that we need cooperation among Southeast Asian countries especially now that we are suffering from oil supply squeeze. If we could only set aside our claims (on Spratlys island) and come up with an understanding or a resolution that will eventually help us all in this crisis," he added.

Last November 2003, EC and CNOOC signed an agreement to undertake joint exploration and development of oil and gas in the South China Sea which could probably include the Spratly’s island.

In a Letter of Intent (LOI) signed between EC and CNOOC, both parties agreed to form a Joint Working Committee to select possible areas in the South China Sea that would be suitable for exploration and development.

Under the LOI, both parties agreed to engage in a joint program to review, assess and evaluate available relevant geological, geophysical and other technical data and information to determine the oil and gas potential of the area.

Incorporated in 1982, CNOOC is a state-owned oil company of People’s Republic of China (PRC). Under the Regulations of the PRC on the Exploration and Development of Hydrocarbon Resources Offshore China in Cooperation with Foreign Partners, the company is authorized by the state government to undertake the exclusive rights and overall responsibilities to jointly explore and develop oil and gas resources of offshore China in cooperation with international oil and gas companies.

CNOOC’s headquarter is located in Beijing and has a total employment of 21,000 personnel. It is one of the largest oil companies and the dominant offshore producer in China.

At present, CNOOC is moving also into the mid and downstream business and towards enhancing its overseas presence to develop into an integrated international energy company.

The Chinese firm conducts oil and gas exploration and development through CNOOC Limited, a publicly-listed company in the New York and Hong Kong Stock Exchanges.