Philippines prods China on terms for joint exploration

MANILA, Philippines — The Department of Energy (DOE) has reached out to its Chinese counterpart to start laying down the framework for possible joint oil and gas exploration in the disputed waters, its top official said.

“The MOU (memorandum of understanding) is to explore a solution. I don’t want to delay so I sent a notice to China through the DFA (Department of Foreign Affairs) saying I am ready and want to meet with them immediately,” DOE Secretary Alfonso Cusi said in an interview with reporters late Wednesday.

The Philippines-China cooperation on joint oil and gas development was signed last month. Both nations have one year to further discuss plans on how to pursue joint activities.

“We have a technical working group so we’re arranging it. We have already said we can start the process anytime,” said DOE assistant secretary Gerardo Erguiza.

The TWG is currently collating details for the MOU.

“It’s a step by step framework on how we are going to work together towards being able to have a fruitful endeavor activity with China regarding these areas covered by service contracts,” Erguiza said.

He said the framework would be covered by the service contract system, which will conform to international law, the United Nations charter, the United Nations Convention on the Law of the Sea.

Erguiza said part of the discussions would include the eventual lifting of the moratorium of exploration activities in the disputed waters.

Among the affected projects include Service Contracts (SC) 72 and 75, led by companies under businessman Manuel V. Pangilinan.

SC 72, which covers Recto (Reed) Bank in the disputed territory, is 78.98-percent owned by PXP Energy through London-listed Forum Energy Plc.

PXP Energy has a direct operating interest of 50 percent in SC 75.

The DOE and DFA are closely working together to lift the moratorium, Cusi said.

 “We want to lift it…but as we do so, we do not want to create problems that we may not be able to handle. The DOE and DFA, together with other government agencies, are working together to find a solution to that problem,” Cusi said.