Investments inflow seen as PH lifts WPS drilling ban

Business, National, News

Department of Energy (DOE) Secretary Alfonso Cusi said investments in oil and gas drilling are expected to flow into the country as the government lifted the moratorium on energy exploration in the West Philippine Sea (WPS).

In a virtual press conference last Friday, Cusi said the lifting of the oil exploration ban will help generate vital investments at the WPS.

DOE Assistant Secretary Leonido Pulido III said that estimated investments by service contractors will amount  to about US$25 million upon lifting the moratorium and some US$78 million more for the remaining exploration work program commitment period.

Cusi said DOE has already advised service contractors to   start addressing their exploration investment commitments. “It has been a long aspiration of our country to attain energy independence, to have our own resources so we don’t need to import. That’s why we are fast-tracking this,” he explained.

The lifting of the oil exploration ban in WPS came after the meeting of Foreign Secretary Teodoro Locsin Jr. and Chinese Foreign Minister Wang Yi last weekend. Cusi, however, said the decision to end the moratorium is an independent decision of the Philippine government.

The previous administration imposed a moratorium on exploration and drilling activities in the WPS due to tensions between Manila and Beijing in the disputed waters. Cusi revealed the Philippine government did not inform China about the decision to lift the ban.

Last month, the DOE cleared bidders for oil exploration in Nominated Areas Nos. 6, 7, and 8, which are all in the WPS. Manny Pangilinan’s PXP Energy Corporation eyes exploration deal in Nominated Area No. 6, while Dennis Uy’s Udenna Energy Corp. targets Nominated Area Nos. 7 and 8.

“They are all within the economic sovereign rights of the country,” the Cusi pointed out. The deals are under the Philippine Conventional Energy Contracting Program (PCECP) launched in 2018 by the DOE to encourage stakeholders to invest, explore, develop, and produce indigenous energy resources.

Cusi clarified that the government’s exploration partners are Filipino private companies, with a 60-40 equity rule in favor of the government. Filipino service contractors, however, can go into a joint ventures with foreign firms in their own equity sharing terms.

“Exploration is not on the negative list. It is not an industry the Constitution reserves only for Filipino citizens. What is critical is that the jurisdiction of the service contract and the sharing mandated by the law and the Constitution is followed,” Pulido stressed.

Leave a Reply