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Oil stocks surge as Duterte allows West PH Sea exploration

Oil companies with interests in the West Philippine Sea saw their stock prices soar on Friday, October 16, as President Rodrigo Duterte lifted the moratorium on oil exploration in the contested area.

Manny Pangilinan's PXP Energy and Roberto Ongpin's Atok-Big Wedge ended the trading day with stocks jumping by over 49%.

PXP Energy operates Service Contract (SC) 75, which is northwest off Palawan. 

Meanwhile, Atok-Big Wedge has an investment in the London-based firm that was granted rights to explore Recto Bank (Reed Bank) through SC 72. Billionaire Dennis Uy is Atok-Big Wedge's vice chairman, after he bought 100 million shares in July 2019. (READ: Reed Bank 'holds huge oil, gas reserves')

Enrique Razon Jr’s Apex Mining, which has interests in SC 72, went up by almost 35%.

Forum Pacific (27.4%), Pangilinan's Philex Mining (20.8%), Philodrill Corporation (13.8%), Oriental Petroleum and Minerals (13.1%), Petroenergy Resources (11.8%), ACE Exenor (11.6%), and Abra Mining and Industrial (10%) also joined the rally on Friday.

Companies comprising the mining and oil sub-index grew by almost 11%, beating the Philippine Stock Exchange index, which dropped by almost 0.7%.

Duterte's decision to lift the moratorium imposed by former president Benigno Aquino III means companies holding SCs 59 (held by Philippine National Oil Company-Exploration Corporation), 72, and 75 can now begin petroleum-related activities in the West Philippine Sea.

Aquino stopped exploration activities during his time after he took China to court for encroachments in the West Philippine Sea.

Duterte's decision to lift the moratorium also comes at a time when the government prepares for the Malampaya gas facility's depletion.

The Department of Energy earlier said the area has billions of barrels of undiscovered oil for additional government revenues. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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