May 9, 2014 7:50 pm JST

Philippines includes disputed area in new petroleum survey project

MANILA(Kyodo) -- A 468,000-hectare area in the South China Sea that is part of disputed Reed Bank was opened Friday by the Philippine government for commercial petroleum exploration as part of measures to secure the country's energy requirements amid Chinese assertions of claims to almost all the area.

     The region, which is one of the 11 blocks offered for petroleum survey under the Fifth Philippine Energy Contracting Round, is within Reed Bank with an estimated resource potential of 165 million barrels of oil and 3,486 billion cubic feet of gas, the Philippine energy department said.

     "Despite no wells have been drilled inside the block, the existence of a working petroleum system in the basin has been proven," the agency said of the area, which, it said "lies adjacent to the Northwest Palawan Basin, the most productive basin in the country."

     Asserting the area is within Philippine territory, Energy Secretary Carlos Jericho Petilla said opening it for exploration should not enrage China, noting China National Offshore Oil Corporation is open to participate in the bidding in partnership with a Philippine-registered company.

     "Given the situation in the area, we ensure that the country can affirm itself that the areas offered in the PECR5 are rightfully ours," Petilla said in a speech.

     Reed Bank, which measures about 7.1 million hectares 250 kilometers west of the Philippines' westernmost island province Palawan, was a site of tense confrontation between Chinese vessels and a Philippine energy survey team in March 2011.

     Petilla said should China protest current plans, the Philippine government will refer the matter to the United Nations.

     "We have brought our dispute (with China) to the U.N. right now. Until that's resolved, we will take the position that it is within Philippine territory," Petilla said.

     "As we live within international laws, we seek all diplomatic recourse to assert our claims to the areas in the West Philippine Sea," he added, using the Philippine name of the South China Sea.

     During the Fourth Philippine Energy Contracting Round, the Philippines also included another area near the Reed Bank for exploration. But the lingering tension with China over the territorial dispute delayed the awarding of a contract to the qualified bidder.

     Aside from the 11 petroleum areas, 15 coal areas in the southern island Mindanao were also opened Friday for exploration.

     The government will begin accepting application of bids for petroleum exploration June 2, and for coal exploration May 29, while endorsement of winning applicants for the former is targeted in May 2015 and for coal in November this year.

     "It is a well-known fact that the Philippine archipelago is vastly rich in different natural resources, especially for energy production. Yet, we can only utilize these through the use of the right technologies and methodologies," Petilla said.