Aquino suspends oil drilling in ARMM

CAMP DARAPANAN, Maguindanao—President Benigno Aquino III Wednesday announced that the government was putting on hold all oil and gas drilling projects in the Autonomous Region in Muslim Mindanao (ARMM) as requested by the Moro Islamic Liberation Front (MILF).

Aquino said he agreed with MILF chair Murad Ebrahim’s suggestion that no bidding or contract award should be done until the government and MILF reach a final agreement on wealth-sharing under a peace deal that would create a new entity called Bangsamoro to replace the ARMM.

“From my understanding, there’s no bidding, no solicitation for bids,” said the President.

“We’re not opening up areas because Chair Murad is right—wealth sharing is one of the annexes that have yet to be finalized,” Mr. Aquino told reporters after inspecting a bus terminal in Pasay City.

Murad said several areas inside the ARMM have been found to be rich in oil or gas deposits. Three of these are in Liguasan Marsh, Central Mindanao and the Sulu Sea, he said.

“We are not against exploitation of our natural resources, including oil and gas, provided that they redound to the benefit of our people,” Murad said.

The MILF entered into a Framework Agreement on the Bangsamoro that provides, among others, the creation of the Bangsamoro entity with greater political and economic powers than the current ARMM.

The extent of governing powers and share in natural wealth of the Bangsamoro is still being negotiated and will be finalized by the end of the year.

Murad said it would be wise for government not to proceed with bidding out energy contracts in the ARMM area “until the wealth-sharing issue is fixed.”

In mid-2011, the government offered to investors 15 so-called energy blocks, or areas for oil and gas exploration, covering a total of some 100,339 square kilometers, which are “mainly located in frontier regions.”

One energy block is in the Cotabato Basin, covering around 456,000 hectares that straddles parts of South Cotabato, North Cotabato, Davao del Sur, Maguindanao and Sultan Kudarat provinces.

The Department of Energy (DOE), in a report, said the estimated amount of oil in the area is 202-million barrels and at least 821-billion cubic feet of gas.

Another area for exploration is in the Sulu Sea covering 432,000 hectares with water depths ranging from 1,500 to 5,000 meters, according to the DOE.

Of the eight wells drilled in the Sulu Sea, “five have significant oil and gas shows,” the DOE said.

This area, the DOE said, has around 209-million barrels of oil and 716-billion cubic feet of gas.