Philippines to award offshore O&G blocks despite China claims

February 28, 2012 | Asia, Licensing & Concessions, Politics & Social Unrest

Philippines_president_Aquino

The Philippine Department of  Energy is proceeding with plans to offer 15 offshore territories for oil and gas exploration, including two areas near Palawan province that China has said are part of its sovereign territory, news website The Daily Tribune reported Tuesday.

“We offered these service contracts which the Republic of the Philippines believes are within its territorial claims,” Energy Secretary Jose Almendras was quoted as saying on the sidelines of the first European Union-Philippines Energy Meeting.

Almendras said the Philippine government hopes to award contracts to the winning bidders in March despite China’s claim that it hold “indisputable sovereignty” over two of the areas lying in the South China Sea.

Philippine officials continue to maintain that the two areas in questions — Area 3 and Area 4 in the licensing round — are not part of the disputed areas in the South China Sea and are well within the country’s territory, The Daily Tribune reported.

The two areas are located about 80 kilometers (50 miles) to the northwest of Palawan province. At least one independent oil company participating in the bidding round has said it is steering clear of Area 3 and Area 4 because of the claims being made by China.

“There is no uncertainty as far as the Republic of the Philippines is concerned,” Almendras was quoted as saying.

China has said the two areas are in waters where it has “historic titles” and “sovereign rights and jurisdiction.”

Vietnam, China, the Philippines, Malaysia, Indonesia, Brunei and Taiwan have long claimed sovereignty over overlapping areas in the South China Sea. Disputes over the region arise mostly because of its suspected vast oil and gas reserves.

China has been periodically exchanging accusations of infringement of territorial waters with both the Philippines and Vietnam since May 2011, with the two smaller nations complaining repeatedly of what they said were increasingly aggressive acts by China in pushing its claims.

The dispute saw all three nations beefing up naval patrols and conducting war games in the South China Sea, with the Philippines saying in January that it would allow a greater US military presence and look to hold more joint military exercises with its former colonial ruler.