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Mining & Energy

Philippines defies China: Will drill two new oil wells in South China Sea


Oil rig in the South China Sea

Oil rig in the South China Sea

A unit of Philippine firm Philex Petroleum Corp plans to start drilling two more wells in disputed waters in the South China Sea even without a partner and despite rising tensions with Beijing, its chairman said on Wednesday.

London-listed Forum Energy Plc will likely start drilling the appraisal wells in its Sampaguita gas field in the Reed Bank, which the Philippines calls Recto Bank, in early 2016, said Philex chairman Manuel Pangilinan.

That means the exploration firm will seek another extension of a drilling permit for the area from the Philippine government. Its current permit expires in August 2015.

“Yes, that is our intention,” Pangilinan said in a mobile text message to Reuters when asked if the company would conduct oil and gas exploration alone and start drilling by 2016.

“That’s the plan of Philex Petroleum, subject to Philippine government approval,” Pangilinan said, confirming a report released by local online news site Interaksyon (link.reuters.com/fec59v)

“And of course, we do not know how China would react,” he said.

Territorial disputes between the Philippines and China have hampered Forum’s plan to drill at least two more appraisal wells within the Service Contract 72 exploration permit awarded to it by the Philippine government in 2010. In 2011, Chinese patrol vessels almost rammed a survey ship contracted by Philex in Reed Bank.

Appraisal wells are drilled to assess the size of gas or oil discoveries.

Philex has previously said it had held initial talks with CNOOC, the Hong Kong-listed unit of China National Offshore Oil Company, for a possible joint venture to explore in the Sampaguita field and defuse tensions between the claimant nations.

But the talks have not progressed so far, with Philex saying it was considering speaking to other potential partners. Manila also said any joint venture should adhere to the constitution and that any gas produced should be used domestically.

A deadline for exploration in the Sampaguita field was first set for August 2013, but Forum requested an extension. The Sampaguita gas field is believed to have reserves of as much as 20 trillion cubic feet.

Philex Petroleum, a unit of the Philippines’ top gold and copper producer Philex Mining Corp, holds indirect and direct stakes totaling nearly 65 percent in Forum.

China claims nearly all of the South China Sea, while the Philippines and Vietnam, along with Malaysia, Taiwan and Brunei, claim parts of it.

Manila insists the Reed Bank is within its 200-mile exclusive economic zone.

Despite competing claims, the Philippines launched on May 9 a tender for exploration rights in 11 oil and gas blocks, including one in a disputed area, Area 7, in Reed Bank.

Source: Reuters “Manila’s Philex plans to drill in disputed waters even without partner”
 

 

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About chankaiyee2

Author of the book "Tiananmen's Tremendous Achievements" about how with the help of Tiananmen Protests, talented scholars with moral integrity seized power in the Party and state and brought prosperity to China. The second edition of the book will be published within a few days to mark the 25th anniversary of Tiananmen Protests All the parts in the first edition remain in the second edition with a few changes due to information available later and better understanding. There are also some changes for improvements of style. The new parts are Chapters 12-19 on events in China after the first edition was published: The fierce power struggle for succession between reformists and conservatives; Xi Jinping winning all elders’ support during his mysterious disappearance for 2 weeks in early September, 2012; and Xi Jinping Cyclone. Chan Kai Yee's new book: SPACE ERA STRATEGY: The Way China Beats The US An eye-opening book that tells the truth how the US is losing to China. The US is losing as it adopts the outdated strategy of Air-Sea Battle while China adopts the space era strategy to pursue integrated space and air capabilities: It is losing due to its diplomacy that has given rise to Russian-Chinese alliance. US outdated strategy has enabled China to catch up and surpass the US in key weapons: Hypersonic weapons (HGV) that Pentagon regards as the weapon that will dominate the world in the future. Aerospaceplane in China’s development of space-air bomber that can engage enemy anywhere in the world within an hour and destroy an entire aircraft carrier battle group within minutes. Anti-satellite (ASAT) weapons, anti-ASAT weapons, stealth aircrafts, drones, AEW&C, etc. The book gives detailed descriptions of China’s weapon development based on information mainly from Chinese sources that the author monitors closely. U.S. Must Not Be Beaten by China! China is not a democracy. Its political system cannot prevent the emergence of a despotic leader or stop such a leader when he begins to bring disasters to people. A few decades ago, Mao Zedong, the worst tyrant in world history did emerge and bring disasters to Chinese people. He wanted to fight a nuclear war to replace capitalism with communism but could not bring nuclear holocaust to world people as China was too weak and poor at that time. If a despot like Mao Zedong emerges when China has surpassed the US in military strength, world people will suffer the misery experienced by Chinese people in Mao era. China surpassing the US in GDP is not something to worry about as China has the heavy burden to satisfy its huge population, but China surpassing the US in military strength will be world people’s greatest concern if China remains an autocracy. US people are of much better quality than Chinese people. What they lack is a wise leader to adopt the correct strategy and diplomacy and the creative ways to use its resources in developing its military capabilities. I hope that with the emergence of a great leader, the US can put an end to its decline and remain number one in the world. China, US, space era strategy, air-sea battle, space-air bomber, arms race, weapon development, chan kai yee

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