PNoy supports consortium with China in Recto bank
MANILA, Philippines - President Aquino supports efforts to include Chinese or other foreign investors in the exploration of the disputed oil- and gas-rich Recto Bank off Palawan coast as long as they comply with the terms and conditions of the contract with Philippine government.
Talks of forming a multinational partnership started this year between Forum Energy, which is chaired by businessman Manuel V. Pangilinan, and China National Offshore Oil Corp (CNOOC), a major state-owned oil firm in China.
Pangilinan's company holds Service Contract 72, which gives it the right to explore Recto Bank (formerly Reed Bank) in the South China Sea. However, Pangilinan said in May he wants to bring in a foreign partner to help with the financing and technical demands of the project.
"This is a major project. There will be a lot of finances that are needed and it is incumbent upon (Pangilinan) to source this financing also. So long as it complies with the terms and conditions as stipulated in the service contract, we have no issue with this venture," the President said.
Forum Energy said it would be investing around $75 million to continue with its drilling program in Recto Bank, which showed a potential of producing 16.6 trillion cubic feet of gas.
This makes the natural gas reserves at Recto Bank far bigger than the gas reserves at nearby Malampaya, the Philippines' largest natural gas producer to date.
Both China and the Philippines claim ownership of Recto bank. Aquino has said the territory is within the 200 nautical mile economic zone extending around the Philippines. He stressed that Recto Bank is just 148 kilometers (80 nautical miles) away from Palawan, while the nearest Chinese territory is 1,066 kilometers (576 nautical miles) away.
Aquino said: "All guidelines are indicated in the service contract, all conditions."
Asked if the conditions mean asserting the Philippines' sovereignty over Recto bank, Aquino replied: "That's automatic. It is our service contract; it is not a joint service contract. So Mr. Pangilinan will be undertaking the venture based on authorization coming from the Philippine government."
The President's statements come amid an ongoing territorial dispute over Scarborough Shoal (also in the South China Sea), which the Philippines calls "Shoal Panatag" and China calls "Huangyan Island." - Rappler.com