Government says Forum Energy area not part of Spratlys

MANILA, Philippines - The government maintains that what it had awarded to British exploration firm Forum Energy Plc is not part of the disputed Spratly Islands.

Energy Secretary Angelo Reyes said “the area where we are converting a GSEC (geophysical survey exploration contract) 101 is within the 200-mile EEZ Exclusive Economic Zone) and if its within the EEZ, the government has the authority to engage in the exploration, development and utilization of natural resources and enter into an arrangement and that authority is within the DOE (Department of Energy).”

Reyes also pointed out that the government was already bound to award this contract to the UK-based oil and gas exploration company as it had a pre-negotiated deal it.

According to Reyes the issuance of service contracts is part of the duties of the DOE.

Forum Energy also stressed that their SC has nothing to do with the dispute in the Spratlys Group of Islands .

In a statement released last week, Forum Energy said GSEC 101, which was recently converted to Service Contract (SC) 72, has a coverage of 880,000 hectares and is located in the Reed Bank basin. 

Reed Bank is at least 150 kilometers east of the Spratlys and is closer to the island of Palawan .

DOE data earlier said that the Reed Bank basin is about 71,000 sq km in area and located about 250 km west of Palawan. The agency earlier estimates indicated that total resources in the basin is around 440 million barrels of oil

Forum Energy reported the other day that it got clearance from the Department of Energy to start drilling in the South China Sea.

According to Forum Energy, its SC 72, formerly geophysical survey exploration contract (GSEC) 101, is within the 200 nautical mile Exclusive Economic Zone (EEZ) based on Republic Act No. 9522 or the Philippine Archipelagic Baseline Law signed on March 10, 2009. 

The first petroleum contract in the area was awarded by the then Ministry of Energy in 1975. The following year, the first of the seven wells was drilled. Over 6,000 kms of 2D seismic and some 250 sq. kms of 3D seismic have been acquired both by foreign and Filipino companies through exploration contracts signed by the Philippine government.  

The GSEC101 licence in which the Company has a 70 percent interest, is the Company’s principal asset, and is situated offshore west of Palawan Island in the South China Sea.