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  • Writer's pictureMelo Acuna

Energy Secretary Cusi hopes service contractors to begin exploration activities

Special Report

Energy Secretary Cusi hopes on China’s declaration that the South China Sea as an “oasis of peace”

MANILA – A day after the Philippine government announced the lifting of the moratorium on the exploration of resources within the West Philippine Sea/South China Sea, Energy Secretary Alfonso G. Cusi expressed optimism that China will support efforts for the joint development as well as pave the way for interested companies to join the licensees and participate in the exploration activities.

In a virtual press conference at midday today, Secretary Cusi said the lifting of the moratorium will have no effect on the Memorandum of Understanding (MOU) signed by the Philippines and China.

“We did it in good faith as the lifting does not stop the possible joint development we might arrive at with China. Chinese corporations and the PNOC can participate in the development. The service contractors affected by the moratorium should now begin their activities,” he said.

He added it was a unilateral decision and we have already asked the licensees to start their activities at the West Philippine Sea.

Secretary Cusi said Service Contract 72 has been awarded to PXP, a Philippine corporation. “As to their partners, I do not know,” he said.

He added it would be best to ask Foreign Secretary Teodoro L. Locsin Jr. of his meeting with State Councilor and Foreign Minister Wang Yi in Yunnan Province over the weekend.

“Based on their statement after the meeting, they described the West Philippine Sea/South China Sea as an oasis of peace so I believe we can do our exploration peacefully,” he explained.

Asked why it took some time for the government to lift the moratorium, he said it was due to the complex issues involved. What’s important, he said, was President Duterte approved their recommendation to lift the moratorium.

He expressed confidence the resumption of exploration activities would mean millions of dollars in investments but refused to reply to the question of the potential resources involved.

“The potential is there,” he said.

The Energy secretary added they invited exploration companies to look into three exploration areas and PXP and Odena submitted their proposals last September 25.

“We are evaluating their proposals and if we find the proposals equitable, we will subject these to Swiss Challenge and we’ll have them published and if awarded, it will be submitted to the President for his approval and signature,” he explained.

Asked of near confrontations in the South China as other countries began their exploration of resources in the SCS, Secretary Cusi said they have informed the Chinese Ambassador (Zhao Jianhua) of the country’s pan to lift the moratorium about a year or two ago.

“We trust China to respect our sovereign decision, they will respect our desire to succeed economically. We have declared a safety radius of 500 meters of the exploration area to assure the safety and security of the companies,” he added.

Asked who will enforce the safety measures after the Armed Forces of the Philippines Chief of Staff General Gilbert Gapay described the prevailing conditions at the South China Sea as “very volatile,” Secretary Cusi said the Philippine Navy and the Philippine Coast Guard are expected to provide the needed security to the companies.

A source at the Philippine Navy said there will be naval presence in the exploration area in addition to their regular patrols at the country’s Exclusive Economic Zone. The same source added they have Littoral Monitoring Stations.

In another development, UP College of Law Associate Dean and former Director of the UP Institute of Maritime Affairs and Law of the Sea said the decision to lift the moratorium is “welcome news” because “it is a step forward to indicate that the government is beginning to turn around on its constant accommodation of China’s demands.”

He described one of the demands was to stop exploration for petroleum in the West Philippine Sea.

Atty. Batongbacal said the decision to lift the moratorium is an exercise of exclusive sovereign rights to its continental shelf in the Western Palawan Region and in accordance with the implementation of the South China Sea Arbitration Award.

The expert on Maritime Affairs and Law of the Sea said the Philippines has already lost time and opportunity in exploring for petroleum because the best time would have been when petroleum prices was high.

“With the pandemic having led to a dampening of those prices, though, the companies may have to look at their financials and portfolios to determine whether it would still be worth the investment this time,” he explained.

Regarding the Joint Development negotiations, Atty. Batongbacal said “this could create some leverage and demonstrate to China that the Philippines is serious about exercising its legitimate right that have been vindicated by the SCS Arbitration Award.”

“China should go back and consider whether its insistence on its illegitimate claims would ever be tenable in this light,” he concluded.(Melo M. Acuña)

Energy Secretary Alfonso G. Cusi (left) and Atty. Jay Batongbacal, Senior Associate Dean, UP College of Law (Photos/Melo M. Acuña)

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