MANILA, Philippines – The local business group led by businessman Manuel V. Pangilinan is considering reviving talks with Chinese state oil firm China National Offshore Oil Corporation (CNOOC) for a commercial deal over Recto Bank (also Reed Bank), an energy bloc at the South China Sea.
The generational leadership changes in the Chinese political party have led the Pangilinan-led Forum Energy Plc. to reconsider the talks following initial efforts and a meeting between the two business groups in Beijing last March.
“[With] the change in leadership in China, Philex Petroleum looks forward to future discussions with CNOOC on Recto Bank following the preliminary meeting held in Beijing earlier this year,” Philex told the exchange on Monday, November 19.
“We also confirm that no new discussions have been scheduled nor initiated,” it added.
“You have to allow them to have a bit of time because these are new leaders of China. We have to be patient,” Pangilinan told reporters on November 16.
Philex Mining Corp’s oil and gas unit, Philex Petroleum, has a 64.45% stake in Forum Energy, which the Philippine government has awarded the sovereign right to explore and develop the Sampaguita gas field west of Palawan province under Service Contract 72.
Pursuing a commercial deal was initially considered an alternative to the the diplomatic and other channels the Philippine and Chinese governments are pursuing amid territorial tensions over the South China Sea. The Philippines claims the areas close to its archipelagic border–including the Sampaguita gas field in the Recto Bank–while China claims all of the sea.
The initial deal talks between Pangilinan’s group and CNOOC faltered after the territorial tension between the two nations escalated following a standoff at the Scarborough shoal and the Northrail project financing mess.
Pangilinan has said they will not forge a deal with foreign partners, including a Chinese one, if the other party will not respect the Philippine’s right over the disputed gas-rich Recto Bank.
2013 targets
Pangilinan said they hope to get a response from CNOOC and that they hope talks will be renewed by 2013. He quickly made it clear that they have not set a deadline or timeframe.
“It’s really up to them,” Pangilinan added.
Meantime, another deadline is approaching, and Forum Energy may ask the government to move it: the August 2013 completion of the first development sub-phase of its work program, which refers to a work and US$75 million investment schedule it has submitted tot the government. The principal component of that is the drilling of two wells in the Sampaguita gas field.
“We were scheduled towards the end of October to bring in a geotechnical vessel in the Recto Bank to do a 7 to 10 day work program. It will supposedly determine the stability of the soil in view of a projected appraisal well drilling sometime in March or April next year,” Pangilinan said.
He said they could not proceed with the planned geotechnical vessel work as they have yet to receive the Department of Energy’s (DOE) permission to proceed with the scheduled work program.
Pangilinan said they have already notified DOE last July 4 due to its 90-day notice policy. “It’s still with them, and obviously we cannot proceed without their permission. So probably we will have to wait until the long weekend to see and assess to what extent we might need an extension,” he said. – Rappler.com
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