By Claire Jiao and Cecilia Yap sure 10/16/2020
(Bloomberg) – The Philippines has lifted its moratorium on oil and gas exploration in disputed areas of the South China Sea, a move that has been hailed by China and that has increased the shares of energy producers in the Southeast Asian nation.
Resumption notices have been sent to Philippine National Oil Company-Exploration Corp., PXP Energy Corp. and Unit Forum Ltd., which run service contracts in disputed areas, according to Energy Secretary Alfonso Cusi. Udenna Corp. offers and PXP Energy to explore three new areas are under consideration and could be the subject of a competitive challenge.
Filipino energy producers have rallied, with PXP, the country’s largest listed oil and gas exploration company on market capitalization basis, raising the daily maximum limit of 50%.
“It is a one-sided action on our part to ask the licensees to start their business,” Cusi said in a virtual briefing on Friday. It is imperative that exploration restart in the Philippine Exclusive Economic Zone, as gas reserves at the Malampaya field will run out in a few years, he said in a separate statement Thursday.
The Philippines suspended oil exploration in the South China Sea in 2015 after the country filed a complaint with the Permanent Court of Arbitration over the disputed waters. In 2016, the international panel rejected Chinese claims about most parts of the sea.
Philippine President Rodrigo Duterte has said he will seek to maintain the tribunal’s victory, even as its leaders saw the nation move closer to China and define a framework agreement that would pave the way for future joint exploration. PXP Energy and the state-owned China National Offshore Oil Corp. were in talks for a possible business before the moratorium.
China National Offshore Oil did not immediately respond to emails seeking comment. PXP Energy chairman Manuel Pangilinan did not immediately respond to cell phone messages.
“China and the Philippines have reached consensus on the joint development of oil and gas resources in the South China Sea, and we have established an appropriate consultation and cooperation mechanism,” the spokesperson said on Friday. of Foreign Ministry Zhao Lijian at a press briefing in Beijing. “We hope that the two sides can work together for further progress in joint development.”