Oil firm stops drilling in West Philippine Sea

Paterno Esmaquel II
Oil firm stops drilling in West Philippine Sea
The Pangilinan-led Forum Energy says the Philippine government has explained that the contract area 'falls within' the disputed West Philippine Sea

MANILA, Philippines – Oil firm Forum Energy announced it will stop its exploration activities in the disputed West Philippine Sea (South China Sea) as ordered by the Philippines’ Department of Energy (DOE).

Forum Energy said the DOE cited the historic case that the Philippines filed against China over the West Philippine Sea.

The oil exploration area, the contested Reed Bank (Recto Bank), is found in the disputed waters.

“Forum Energy, the UK incorporated oil and gas exploration and production company with a focus on the Philippines, today confirms that the Philippine Department of Energy has granted a force majeure on Service Contract 72 (SC 72) because this contract area falls within the territorial disputed area of the West Philippine Sea which is the subject of an United Nations arbitration process between the Republic of the Philippines and People’s Republic of China,” the firm said in a statement Monday, March 2.

The DOE said force majeure “refers to events beyond the reasonable control of the affected party.”

Forum Energy said: “Under the terms of the force majeure, all exploration work at SC 72 is immediately suspended (effective from December 15, 2014) until the DOE notifies the company that it may commence drilling. As a result, the second subphase of SC 72 has been put on hold until further notice.”

“The terms of the second subphase and all subsequent subphases will be extended by the term of the force majeure. Further updates on SC 72 will be made as and when appropriate,” it added.

Led in the Philippines by businessman Manuel V Pangilinan, the oil firm issued this statement as two Philippine government agencies sent mixed signals about the reported suspension.

DFA’s advice

Energy Secretary Carlos Jericho Petilla, on one hand, said the Department of Foreign Affairs (DFA) advised the DOE to “hold off” exploration activities in Recto Bank because of certain developments between the Philippine and Chinese governments.

DFA spokesman Charles Jose, on the other hand, said: “Philippine development activity in the West Philippine Sea will take place in accordance with the national interest, following Philippine laws, and in conformity with international law including the United Nations Convention on the Law of the Sea (UNCLOS).”

It is unclear from Jose’s statement if this means the DFA didn’t tell the DOE to “hold off” exploration activities, and the DOE doesn’t need to suspend Forum Energy’s permit.

The UNCLOS, which the DFA mentioned, is the basis for the Philippines’ claim over exclusive rights to explore and exploit marine resources 200 nautical miles (NM) from its baselines or edges.

The Philippines asserts Recto Bank falls within its 200-NM exclusive economic zone.

The reported suspension of oil drilling activities came as the Philippines calls for a moratorium on activities that raise tension in the disputed sea.

The Philippines accuses China, however, of breaking the status quo in the West Philippine Sea by building artificial islands there. – Rappler.com

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Paterno Esmaquel II

Paterno R. Esmaquel II, news editor of Rappler, specializes in covering religion and foreign affairs. He obtained his MA Journalism degree from Ateneo and later finished MSc Asian Studies (Religions in Plural Societies) at RSIS, Singapore. For story ideas or feedback, email him at pat.esmaquel@rappler.com.