Philex Petroleum Corp. Chairman Manuel Pangilinan indicated that the firm, which holds a 60.49 percent interest in Forum Energy Plc -- the owner of a 70 percent stake in Service Contract (SC) 72 in the Reed Bank offshore west Palawan -- needs a foreign partner to explore for oil and gas in the South China Sea following the ruling Tuesday by the Permanent Court of Arbitration in The Hague that China has breached the sovereign rights of the Philippines with its action in the region.
Under SC 72, Forum Energy holds exploration rights for Reed Bank, a part of the South China Sea that is within the Philippines' exclusive economic zone but also within what China calls the "nine-dash line." China has declared it would ignore the ruling.
The Nikkei Asian Review (NAR) reported Thursday that Pangilinan indicated that Philex Petroleum's next move would depend on the new Philippine government led by President Rodrigo Duterte, which has not not firmed up its position on how to deal with potential resources in the South China Sea.
"We have to take our cue from the (Duterte) government ... We don't want to move without the government guiding us on what to do," Pangilinan said in the NAR report.
Duterte has recently said he is open to joint oil and gas exploration with China.
"I think we will need a partner because it's a big project, assuming there's gas there ... We will need a partner, foreign of course," Pangilinan said Wednesday, as quoted by NAR.
The Philex Petroleum Chairman said no Philippine company has the competence to exploit offshore oil and gas reserves on its own.
Forum Energy indicated in its 2011 earnings report that seismic survey of the SC72 license indicated a mean volume of 3.4 trillion cubic feet of gas-in-place with significant upside.
Philex Petroleum initiated talks with China National Oil Offshore Company (CNOOC) in 2012 on a possible joint exploration of Reed Bank, but nothing came out of it.
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