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Philippines plans to drill for oil and gas in disputed South China Sea



The competing claims to sovereignty over the South China Sea

Drilling for oil and natural gas in the South China Sea’s Reed Bank may resume before the end of the year, a Philippine energy official announced today (Wednesday, July 12).

The Philippines suspended exploration at the Reed Bank, which is also known as Recto Bank, in late 2014, as it prepared to launch an international arbitration over the ownership of the waters which are claimed by China.

Ismael Ocampo, director at the Department of Energy’s Resource Development Bureau, said he expected the suspension to be lifted in December.

He said a directive from the Department of Foreign Affairs directing the Department of Energy to resume oil and gas exploration was already in the works.

China claims almost the entire South China Sea, through which about $5 trillion worth of sea-borne goods pass every year. The Philippines, Brunei, Malaysia, Vietnam and Taiwan also have claims.

One year ago, the Permanent Court of Arbitration in The Hague invalidated China’s claim to sovereignty over most of the South China Sea.

The ruling, which China has refused to recognise, confirmed Philippine sovereign rights in its 200-mile Exclusive Economic Zone to access oil and gas fields, including the Reed Bank, which is 85 miles off its coast.

“We will try to conduct seismic activities,” Mr Ocampo said, adding that he hoped China would not complain or harass crews of survey ships.

In 2011, Chinese patrol vessels almost rammed a Philippine survey ship at the Reed Bank.

President Duterte, who took power shortly before the Hague ruled in favour of the Philippines, has said he would raise the landmark ruling with China eventually, but he first wanted to improve relations with Beijing.

The president hopes closer ties with China will yield billions of dollars in loans and investment.

PXP Energy Chairman Manuel Pangilinan said in March he was optimistic his company’s exploration project at Reed Bank would soon resume, citing improving relations with China.

The Philippines is under pressure to develop energy resources. Its main source of natural gas, the Malampaya field near the disputed waters, is expected to run out in less a decade.

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