DND chief: Oil search now up to next admin
Defense Secretary Delfin Lorenzana. FILE PHOTO
MANILA, Philippines —The fate of oil exploration activities in the West Philippine Sea is now up to the next administration to be elected in the May 9 polls.
Defense Secretary Delfin Lorenzana said on Wednesday that it was unlikely that the Philippine government would walk back on its decision to suspend such activities within the Duterte administration, which ends on June 30.
“I think we can no longer reverse that, to give a go-signal (to resume oil exploration) because even the President agreed with us to hold it off,” he said.
The search for oil particularly in areas in offshore Palawan was allowed to resume in October 2020 after President Duterte lifted a six-year moratorium, which was imposed by his predecessor Benigno Aquino III due to rising tensions with China.
However, the Department of Energy (DOE) again suspended these activities on April 6 pending a go-ahead from the Security, Justice and Peace Coordinating Cluster (SJPCC) of the Cabinet due to “the political, diplomatic and national security implications of any activity in the West Philippine Sea.”
Lorenzana, who chairs the SJPCC, said the government’s decision to suspend exploration in the disputed waters stays due to concerns over a possible conflict with China.
“We discussed it with the SJPCC and we think that we will be facing some problems there, an objection from the Chinese because this is unilateral…. and there was this agreement that was signed between the Philippines and China before on joint exploration,” Lorenzana said on the sidelines of the Asia Defense and Security exhibition at World Trade Center in Pasay City.
“We are just avoiding a possible conflict in the West Philippine Sea,” he added.
It was the President who said last month that the country had no choice but to abide by a supposed joint exploration deal with Beijing to avoid conflict.
Speculative play
The President also questioned why PXP Energy Corp. and its subsidiary Forum Energy Ltd. had to do the seismic surveys, which will give an idea of what energy resources are underneath the waters, only now when the moratorium was lifted in 2020, according to Lorenzana.
The two firms were hired by the government to conduct exploration activities for Service Contracts 75 and 72.
“Why only now? Maybe we can’t emplace it now. The President said we’ll just leave it to the next administration on how to deal with the joint exploration,” he said.
This now means a longer wait for investors speculating on rich energy finds in the West Philippine Sea and the stock market has already been pricing in these delays.
Listed companies such as Manuel V. Pangilinan-led PXP Energy and Atok-Big Wedge Co. Inc. have lost massive share price gains since President Duterte lifted the moratorium in 2020.
PXP is down 67 percent while Atok, a company led by billionaire Roberto Ongpin and Davao-based tycoon Dennis A. Uy, plummeted by 68 percent from their recent highs in December 2020.
Luis Gerardo Limlingan, managing director at Regina Capital Development, said investors would “wait and see” until the results of the May 9 elections.
He said they would also be on the lookout for the next president’s stance on oil exploration since some candidates are perceived to be friendlier to Beijing despite its incursions in the West Philippine Sea.
Atok’s subsidiary, Tidemark Holdings Ltd., owns 20 percent of UK-based Forum Energy, which has a 70-percent stake in Service Contract 72 located west of Palawan Island. It is host to the Sampaguita offshore gas discovery.
PXP owns 79 percent of Forum Energy apart from interests in other oil exploration service contracts in the Philippines and a petroleum block in Peru.
Fuel depot
Meanwhile, the Philippine government will build a fuel depot on Pag-asa (Thitu) Island in the West Philippine Sea.
National Security Adviser and National Task Force for the West Philippine Sea chair Hermogenes Esperon Jr. led the groundbreaking for the fuel storage facility last Monday.
Pag-asa, the biggest and most strategically important Philippine outpost in the Kalayaan Island Group, is 400 kilometers from mainland Palawan province.
The Armed Forces of the Philippines earlier disclosed plans to put up a logistics hub on the island to effectively sustain its patrols.
Esperon told the Inquirer on Tuesday that he also checked out the Pag-asa Island Research Station manned by members of the University of the Philippines Marine Science Institute as part of his visit.
The station, which opened in October last year, aims to boost scientific research and reinforce Philippine sovereignty in the area.
Esperon, who was joined by officials from Western Command and his task force staff, took the opportunity to talk to the fishermen living on the island.
“We are putting up a support system for Filipino fishermen,” he said without elaborating.
Filipino fishermen on Pag-asa, the only Philippine-occupied feature in the Kalayaan islands with civilian inhabitants, have lamented the harassment of the China Coast Guard and the presence of Chinese maritime militia in recent years.
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