MALACAÑANG on Tuesday said it is “doing everything” to ensure that a joint oil exploration deal between the Philippines and China on the Service Contract (SC) 72 located in the disputed Recto (Reed) Bank in the West Philippine Sea will be signed during Chinese President Xi Jinping’s visit to Manila in November.
“We are doing everything we can to make sure that when President Xi comes here, we can sign a joint exploration [deal] for natural gas an oil to help us achieve energy security,” Palace Spokesperson Herminio L. Roque, Jr. said at a briefing Tuesday.
Mr. Roque said joint exploration would help insulate the Philippines from high global oil prices. “One of the things we are studying and wish to bring forward is joint exploration in the West Philippine Sea because according to initial studies there is natural gas and oil in the Service Contract 72 area.”
Mr. Roque also noted that the scheduled increase in the excise tax on fuel under the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) law will be suspended if global oil prices hit or exceed $80 per barrel “for three consecutive months.”
“Now that it has hit $80 [per barrel]… and if it stays there for three months, excise taxes will not rise because that is what the law says. It is up to Congress if it wants to repeal the law. The President can do nothing because it’s a law,” he said.
He called for unity and the setting aside of differences in order to achieve a joint exploration deal that will reduce the country’s dependence on imports.”
The Department of Energy (DoE) issued a moratorium on all exploration and drilling works in Service Contracts 72 and 75 in December 2014 and 2015, respectively, due to the maritime dispute between the Philippines and China over the West Philippine Sea.
Mr. Roque said joint exploration will require a treaty or executive agreement because of the Chinese claim.
Asked when the Palace expects joint exploration to start, Mr. Roque said: “As soon as possible. As soon as it’s signed, we are willing to undertake further steps, although it will not be producing immediately.”
He said the government hopes it can tap an alternative energy source shortly after the production contract for the Malampaya gas field off Palawan expires in 2022.
“We are hoping that by around 2027 SC 72 will be producing,” he added.
The Recto Bank concession or SC 72 is west of Palawan and southwest of the Shell-operated Malampaya Gas Field, a deepwater gas-to-power project in SC 38. — Arjay L. Balinbin

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