Oil And Gas Development In West Philippine Sea And South China Sea Conflict – Analysis


After six years since 2014, the President Rodrigo R. Duterte finally lifted the moratorium on oil and gas exploration in the West Philippine Sea (WPS), a unilateral action that Energy Secretary Alfonso Cusi described as an exercise of sovereign rights of the Philippine government in accordance with existing international laws, particularly the United Nations Convention on the Law of the Sea (UNCLOS).

The Department of Energy has now issued a notice to Service Contractors to “resume to work” on petroleum-related activities in WPS, particularly in areas of covered by Service Contracts 59, 72, and 75.

What are the implications of this decision for Philippine economic development and the management of territorial and maritime disputes in the South China Sea, particularly on Philippines-China relations?

The resumption of natural gas and oil exploration activities in the aforementioned Service Contracts has huge potential to trigger Philippine economic development because it can address the Philippines’ growing energy requirements. The lifting of the moratorium will now enable the Philippine government to implement the following Service Contracts:
SC 72 located at Reed Bank with a size of 880,000 hectares
SC 75 located at North West of Palawan with a size of 616,000 hectares
SC 54 located at North West of Palawan with a size of 99,515 hectares
SC 58 located at West Calamian also North West of Palawan with a size of 1,344,000 hectares
SC 59 located at West Balabac of South West of Palawan with a size of 1,476,000 hectares
According to the combined study conducted recently by the Department of Energy (DOE) and the National Mapping and Resource Information Authority (NAMRIA), the Reed Bank/Recto Bank basin where SC 72 is located, can potentially provide an estimate of 3.9 trillion cubic feet (Tcf) of natural gas worth US$ 19.9 billion and an estimate of 35 million barrels (MMbbl) of oil worth US$ 2.1 billion, not to mention an estimate of 21 MMbbl or oil condensates worth US$ 1.2 billion.