South China Sea-Spratly
(Click to Enlarge)
MANILA July 02, 2008 (Dow Jones Newswires)
The Philippines has formed a Cabinet committee to determine whether it will extend a deal with China and Vietnam to jointly explore for oil and gas in a disputed area in the South China Sea, Energy Secretary Angelo Reyes said Wednesday.
The joint exploration agreement that was signed in June 2005 expired on Tuesday. Under the agreement between state oil companies of the three Asian nations, seismic surveys have been conducted and the results have been described as "encouraging."
"There is a committee organized for this purpose and it is chaired by the Department of Foreign Affairs," Reyes told reporters. He refused to reveal whether the energy department is inclined to support the deal's extension.
As energy secretary, Reyes heads the state-owned Philippine National Oil Co., whose unit PNOC Exploration Corp. (PEC.PH) is a signatory to the original agreement with China National Offshore Oil Co. and Vietnam Oil and Gas Corp.
Some Philippine lawmakers wanted the joint survey to be canceled as this could weaken the country's claim on the Spratly Islands, which is part of the disputed area. They also said the survey violates the Philippine Constitution, which allows only the Manila government to explore and exploit natural resources within its territory.
Apart from the Philippines, China and Vietnam, countries also claiming the Spratlys are Malaysia, Brunei and Taiwan.
The Spratlys, a group of more than 100 reefs, islets and islands, offer rich fishing grounds and could potentially contain significant deposits of oil and gas.
Copyright (c) 2008 Dow Jones & Company, Inc.