Philippines Lifts Years-Long Ban On South China Sea Energy Exploration

KEY POINTS

Foreign direct investments into the exploration sector will help boost the country's economy
The lifting of the suspension also comes as the Philippines faces dwindling energy reserves
Energy Secretary Alfonso Cusi said, "We need to explore so we may address the country’s energy security."

The Philippines president Rodrigo Duterte has lifted a ban on oil and gas exploration in disputed areas of the South China Sea, which was imposed six years ago after a territorial squabble.

A move welcomed by China, the lifting of the moratorium has also boosted the shares of the Southeast Asian nation’s energy producers.

“It’s a unilateral action on our part to ask licensees to start their activity,” Energy Secretary Alfonso Cusi said Friday.

Cusi thanked the Philippines president for approving the energy department’s recommendation to lift the years-long ban on energy exploration. He said, "We need to explore so we may address the country’s energy security."

Cusi is also reported to have added that foreign direct investments into the exploration sector will help boost the country's economy, which has already been shattered by the coronavirus pandemic, the Economic Times reported.

“China and the Philippines have reached consensus on the joint development of oil and gas resources in the South China Sea, and we have established relevant consultation and cooperation mechanism. We hope the two sides can work together for new progress in the joint development," Foreign Ministry spokesman Zhao Lijian said, World Oil reported.

The lifting of the suspension also comes as the Philippines faces dwindling energy reserves.

Malampaya gas field, which supplies about 40 percent of power to the archipelago's main island Luzon, is expected to run dry within a few years.

Cusi also said that the resumption of exploration activities in the region would also help boost the country's economy, which has been ravaged by the coronavirus pandemic.

According to data, millions lost their work and almost 350,000 people have been infected with the novel coronavirus since the outbreak began.

In 2015, the Philippines suspended oil exploration in the South China Sea after a case with the Permanent Court of Arbitration over the disputed waters was filed.

Later in 2016, the international panel rebuffed Chinese claims over most parts of the sea.