MANILA, Philippines – Filipino tycoon Manuel Pangilinan, whose firm holds an exploration permit covering the Reed Bank, remains optimistic that Philippine President Rodrigo Duterte and Chinese Premier Li Keqiang can agree to share untapped oil and gas prospects in the disputed West Philippine Sea (South China Sea).
This was after China and the 10 leaders of the Association of Southeast Asian Nations (ASEAN) on Monday, November 13, agreed to start talks on a Code of Conduct (COC) in the South China Sea.
The aim is for the COC to ensure peace and stability in the disputed waters.
"I remain optimistic that given the more hospitable attitude of this government towards China, hopefully something will work out," Pangilinan said on the sidelines of the ASEAN Business and Investment Summit in Parañaque City on Tuesday, November 14.
Pangilinan's PXP Energy Corporation, through its London-listed unit Forum Energy Plc, holds an exploration permit covering the Reed Bank.
It was in 2015 when the Department of Energy (DOE) suspended operations within the disputed area, as the Philippines pursued international arbitration.
The Pangilinan-led firm was initially in talks with China National Offshore Oil Corporation (CNOOC) to develop a part of the Reed Bank.
But with China asserting ownership of almost the entire South China Sea, including the Reed Bank area, exploration efforts of PXP Energy were stalled.
Asked if his firm has resumed talks with its partner, Pangilinan replied: "It's just hard to say that we are or we are not. Privately, it is private. I think it is best to wait for a statement from both governments."
As part of the 31st ASEAN Summit and Related Summits, ASEAN and China vowed not to take the "calmer" situation in the South China Sea "for granted."
Pangilinan is hopeful there will now be progress.
"We are businesspeople. For a number of reasons, way back in 2014, the then-government suspended the activities in the so-called disputed territory Reed Bank. Since that time, there has been no work done by ourselves, and I guess, as well as others in their respective concession areas," he said.
"We would like to proceed. This is merely from our perspective to finalize the survey work, do exploratory [works], and determine – once and for all – whether there is gas in the concession," the PXP Energy chief added.
Oil and gas reserves at the Reed Bank are speculated to be larger than those in the Malampaya natural gas field. (READ: Cayetano on joint dev't in South China Sea: Check Constitution first)
Malampaya – of which power plants account for 40% of the electricity requirement of Luzon – is expected to run out of gas by 2024. Pangilinan pointed out that developing a gas field would take at least 10 years.
"If there is gas, we would want to know if it is in commercial quantity, especially given today's fuel prices. Prices have gone up," the tycoon added.
Petroleum firms in the Philippines on Tuesday raised gasoline prices by P0.95 per liter, diesel by P0.60, and kerosene by P0.95.
Once Malampaya reserves run out, Pangilinan said a key source of energy in Luzon could be the potential oil and gas reserves at the Reed Bank.
"But if there [are] no gas [reserves] at the Reed Bank, what are we gonna fight for? Fish? That is all we want to establish. If for some reason, it would not proceed, then there is nothing we, as businesspeople, can do," the tycoon said.
"However, we are quite optimistic that something could happen, but that is entirely beyond our control," he added. – Rappler.com