Solon pushes completion of offshore gas development drilling project in Recto Bank


Despite tensions with China, the chairman of the House Committee on Strategic Intelligence on Tuesday said two offshore gas drilling activities in Recto Bank must proceed as scheduled gas deposits there could yield up to P910 billion in future royalties for the government.

Surigao del Sur Rep. Johnny Pimentel, in a news statement, said Sampaguita gas discovery in Recto Bank has the potential to energize the entire national grid—not just Luzon—for the next 20 to 30 years.

“We have no choice but to carry on with the drilling activities,” he said.

Sampaguita gas discovery is located 250 kilometers southwest of Malampaya. Citing Department of Energy records, Pimentel said Sampaguita’s operator is required to drill two offshore appraisal wells on or before October 16, 2022.

“In fact, if the groups clamoring for a government buyout of the Malampaya gas field really want to carry on with their foolishness, they should target Sampaguita, which is far more valuable to the country’s future energy security,” Pimentel said.

According to Pimentel, Sampaguita is “an untapped value-changing asset” with up to 4.6 trillion cubic feet of gas, while Malampaya, which has been producing gas for the last 20 years, has only 1.6 trillion cubic feet of residual gas at best.

“There is even one study suggesting that the entire Recto Bank has up to 20 trillion cubic feet of potential gas in place,” Pimentel said.

The Permanent Court of Arbitration in the Hague ruled in July 2016 that Recto Bank is within the Philippines’s exclusive economic zone, as defined under the 1982 United Nations Convention on the Law of Sea.

By virtue of the ruling, the Philippines enjoy absolute rights to exploit all resources in the seamount.

Force majeure

Amid rising tensions in the West Philippine Sea, Pimentel also warned the Department of Energy (DOE) against imposing another force majeure on Forum Energy Ltd., the operator of Sampaguita, which is located 250 kilometers southwest of Malampaya.

“A second force majeure would be a colossal sign of weakness on the part of the Philippine government,” Pimentel said.

“We also do not want Forum Energy to invoke the tensions as an excuse to voluntarily postpone the programmed gas drilling activities,” Pimentel said.

During the Aquino administration, the DOE in December 2015 placed all petroleum service contracts in and around Recto Bank under force majeure on account of the dispute with China over maritime claims.

In October last year, the Duterte administration lifted the force majeure, thus allowing the resumption of gas exploration work.

When it lifted the force majeure, DOE gave Forum Energy a two-year deadline, or until October 16, 2022, to drill its two commitment wells in Sampaguita at a cost of $100 million (P5 billion).

Forum Energy, which has a 70 percent operating stake in Sampaguita, is expected to drill the two wells under 260 feet of water at target depth of 10,300 feet below the seabed.

Tensions in the West Philippine Sea have risen in recent weeks, after Chinese Coast Guard vessels blocked and water cannoned two Philippine civilian boats on November 16.

The boats were on a resupply mission to a Marines detachment at the BRP Sierra Madre, an obsolete tank landing ship that the Philippine government purposely ran aground in 1999 on Ayungin Shoal to serve as an outpost in the Kalayaan Islands (Spratly Islands), some 194 kilometers west of Palawan.

Sampaguita is projected to contain 2.6 trillion cubic feet of in-place gas and 5.5 trillion cubic feet of in-place prospective gas, according to an independent assessment by Weatherford Petroleum Consultants.

Another study estimates Sampaguita’s potential resources at 3.4 trillion cubic feet of gas and 440 million barrels of oil.

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