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Philippines lifts upstream

moratorium in disputed waters

With production projected to dry up from the giant Malampaya gas field, Manila
hopes to be able to bring a replacement on stream within the next few years

COMMENTARY THE Philippines has lifted a six-year morato- “[Duterte] has approved the recommen-
rium on exploration in disputed waters of the dation of the Department of Energy [DOE] to
South China Sea in response to growing con- lift the suspension of petroleum activities and
WHAT: cerns over the country’s future energy security. the resumption of petroleum exploration in
Philippine President The country relies heavily on the giant the WPS,” Energy Secretary Alfonso Cusi told
Rodrigo Duterte has lifted Malampaya offshore natural gas field to power reporters on October 15.
a six-year moratorium several thermal power plants (TPPs) on the Cusi said China National Offshore Oil
covering blocks in main island of Luzon. However, with the field Corp. (CNOOC) as well as state-run Philippine
disputed waters. anticipated to begin running dry over the next National Oil Co. (PNOC) and privately owned
few years, the government has turned to LNG Udenna Energy and PXP Energy stood to gain
WHY: imports to help plug the gap. immediately from the ban being lifted.
The country’s domestic This will eventually see the Philippines “We need to explore, so we may address the
gas production is set to become heavily reliant on foreign supplies of the country’s energy security,” Cusi said. He added:
decline rapidly in the fuel, given local opposition to coal-fired power “The lifting of the moratorium was arrived at in
coming years. generation and the lack of nuclear-powered good faith and with full regard to the ongoing
alternatives, as the country continues to tran- negotiations between the Philippines and China,
WHAT NEXT: sition towards renewable energies. Relying on and Forum Ltd and CNOOC.”
PNOC hopes to bring new foreign hydrocarbon supplies inevitably raises Manila and Beijing have been negotiating for
fields on stream by 2026, some serious questions about national energy years over the joint exploration of the disputed
but possible investment security, given rising tensions along trade routes waters, with both sides eager to begin develop-
hurdles could scupper in the South China Sea as well as market volatil- ment while reluctant to give any ground over
this goal. ity that can result in a seesawing of energy prices. sovereignty. Duterte has courted controversy at
home for his more relaxed approach to China’s
Lifting the ban claim over areas that lie within the Philippines
By lifting the moratorium on exploration drilling exclusive economic zone (EZZ).
and seismic data acquisition in waters that both The president has repeatedly sidelined the
China and the Philippines claim, which Manila Permanent Court of Arbitration’s (PAC) ruling
has dubbed the West Philippine Sea (WPS), Phil- in 2016 that dismissed much of China’s claim to
ippine President Rodrigo Duterte hopes to kill the South China Sea in order to proceed with
two birds with one stone. negotiations surrounding joint exploration of

P10 www. NEWSBASE .com Week 42 22•October•2020