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Philippines to exploit energy deposits in disputed oil fields -- Aquino
PRESIDENT Benigno S.C. Aquino III, currently at the Asia Pacific Economic Cooperation (APEC) Summit in Hawaii, announced that the Philippines will soon be exploiting energy deposits reputedly larger than the Malampaya oil and gas fields in the disputed areas in the West Philippine Sea (South China Sea).
Mr. Aquino, at a panel discussion on “Commodity Security for Economic Growth” yesterday, said that the Philippines will have to assert its entitlement to the energy-rich fields located in the 200- mile exclusive economic zone (EEZ) under the United Nations Convention on the Law of the Sea (UNCLOS) to augment its power needs.
Competing claims in sections of the South China Sea are being asserted by China, Brunei, Malaysia, Taiwan, Vietnam and the Philippines.
“There’re substantial gas deposits that we believe are already on the proven scale at this point in time will dwarf the existing Malampaya oil fields,” claimed Mr. Aquino, based on the transcript provided by Malacañang.
Notably, the Malampaya deepwater gas-to-power project site, located 80 nautical miles northwest of Palawan Island, currently generates 2,700 megawatts of electricity or 40-45% of the energy requirements of Luzon.
“There is a new field that is gonna be brought up or is gonna start I understand by next year by an American company in the northern portion of the Philippines,” Mr. Aquino indicated.
The President reminded that the Philippines is only “second to America in terms exploiting geothermal resources,” and moreover, that it has considerable energy resources as yet untapped.
“Some of them are in areas that are part of the contentious disputes as to the sovereignty over the same and we are working on steps to determine [if] they actually own them consistent with United Nations Convention on Law of the Sea,” Mr. Aquino, however, admitted.
Nevertheless, he underscored that the newly discovered sites under study are still squarely within the EEZ over which the Philippines is sovereign.
“We are hoping that all the signatories of the United Nations Convention will adhere to the stipulations of the convention and amongst them are the 200-mile exclusive economic zone, which clearly shows that the areas in dispute are in our favor…,” said Mr. Aquino.
The President asserted that the Philippines is keen on using various mechanisms, including international arbitration, “to settle that matter once and for all and to have this resources benefit not only our country but also the neighbors in the region.”
Utilizing such energy resources, Mr. Aquino argued, will have a transformative effect as it will reduce dependence on the Middle East by shifting to indigenous sources of energy.
Further, he pointed out that an abundance of electrical supply and the firm establishment of a wholesale electronic spot market would induce competition and bring down power rates, and thereby encourage more investors to the country.
Business groups have repeatedly indicated that the high power costs in the Philippines are a deterrent for foreign investors.
Mr. Aquino said that energy security for the Philippines is pursuing alternative energy sources to ensure that the costs are “much more reasonable for power then to electricity side,” which also includes switching transportation needs “from diesel to natural gas.”
“We have a very vibrant renewable energy sector,” boasted the President.
The panel discussion, which was moderated by Bloomberg senior editor Diane Brady, was held at the Sheraton Waikiki in Honolulu.
Other participants in the event were Frank Ning Gaoning, CEO of the China National Cereals, Oils and Foodstuffs Corporation; Richard Adkerson, president and CEO of the Freeport McMoRan Copper and Gold Inc.; and Jane Ulrich, managing director and chairman of the Global Markets, China, JP Morgan.
Mr. Aquino will be in Hawaii until the conclusion of the APEC Summit on Nov. 13. He will return to Manila on Nov. 15 and will arrive on Nov. 16. -- Johanna Paola D. Poblete
