DOE stops oil drilling in West Phl Sea

MANILA, Philippines - The Department of Energy (DOE) has suspended all drilling and exploration works in the disputed West Philippine Sea, particularly at the Recto (Reed) Bank section of the sea.

In a disclosure to the Philippine Stock Exchange yesterday, Philex Petroleum Corp. said the DOE has granted a force majeure on Service Contract (SC) 72 in Recto Bank, which is the subject of a territorial dispute between the Philippines and China.

“Under the terms of the force majeure, all exploration work at SC 72 is immediately suspended until the DOE notifies the company that it may commence drilling. As a result, the second sub-phase of SC 72 has been put on hold until further notice,” the disclosure read.

The contract area falls within the United Nations arbitration process between the Philippines and China.

UK-listed Forum Energy said the DOE halted its exploration activities in Recto Bank as of Dec. 15 last year.

No reason was given for the long delay in announcing the suspension order.

Philex Petroleum holds a 60.49-percent interest in Forum Energy, which operates SC 72 in Recto Bank covering the Sampaguita Gas Field as well as several oil and gas leads. Forum Energy has a 70-percent stake in SC 72.

In July last year, Forum Energy was granted a one-year extension or until Aug. 15, 2016 to drill two appraisal wells under the second sub-phase of its work program in SC 72.

The contract was awarded to Forum Energy by the Philippine government in 2010. Exploration and development in the area, however, have failed to proceed since 2012 amid geopolitical tensions in the disputed sea.

Forum Energy completed 2D and 3D seismic surveys in 2011 to identify the best locations to drill appraisal wells as part of the first sub-phase work program of SC 72.

Earlier, Philex chairman Manuel V. Pangilinan said Forum Energy plans to spend between $40 million and $60 million for exploration work in Recto Bank.

Pangilinan said that Forum Energy could start drilling activities by March 2016 given seasonal factors as well as the time needed to mobilize an oil rig.

An independent study commissioned by Forum Energy placed the gross reserves of gas at the Sampaguita gas field at over 11 trillion cubic feet.

The volume, the study said, is larger than the Malampaya natural gas field’s reserves at 2.7 trillion cubic feet.

When asked about the ruling, foreign affairs spokesman Charles Jose referred to the UN Convention on the Law of the Sea (UNCLOS).

“Philippine development activity (in the area) will take place in accordance with national interest, following Philippine laws and in conformity with international law, including UNCLOS,” Jose said.

Meanwhile, the Philippines has reiterated its strong call on China to stop all Chinese reclamation activities in the West Philippine Sea.

Speaking at the Security Council Open Debate at the United Nations headquarters in New York on Feb. 23, Philippine Deputy Permanent Representative to the UN Irene Susan Natividad said the country’s recourse to settle the sea dispute is a testament of its commitment to the principles of the UN Charter.

“Massive reclamation is a direct threat to the Philippines and other claimant states and should be considered a great concern for all states as it threatens the security and overall peace and stability in the region. Moreover, the massive reclamation that is causing widespread destruction of the region’s biodiversity will irreparably damage the entire ecological balance in the West Philippine Sea,” Natividad said.

The forum, with the theme “Maintaining International Peace and Security: Reflect on History, Reaffirm the Strong Commitment to the Purposes and Principles of the UN Charter,” was convened by China in its capacity as president of the Security Council for the month of February.

Several foreign ministers of the Security Council, including Chinese Foreign Minister Wang Yi, attended the event.

The Security Council is the UN body primarily responsible for the maintenance of international peace and security.

The Philippines reaffirmed its commitment to promote global peace and security by peaceful settlement of disputes in the West Philippine Sea. – With Pia Lee-Brago, AFP