Malacañang has finally lifted the moratorium on oil and natural gas exploration in the Recto (Reed) bank, allowing Forum Energy Ltd. to contract the ship that will survey and start drilling in the area, a highly reliable source disclosed to VERA Files.
“I don’t know if they (Forum) actually signed [a contract] already, but I know it has been unofficially lifted so they could act,” the source said.
Forum Energy, a subsidiary of PXP Energy Corp. majority owned by business tycoon Manuel Pangilinan, operates Service Contract 72 in Recto Bank located in the West Philippine Sea (WPS). Recto Bank is within the country’s 200-nautical mile exclusive economic zone, but is also claimed by China.
The project was meant to replace the Malampaya gas field which was expected to be depleted by 2027. However, it has been stalled since 2014 when former president Benigno Aquino issued a moratorium due to rising tension with China and after the Philippines filed an arbitration case against Beijing in The Hague.
In a forum on the 8th anniversary of the country’s arbitral win on the WPS hosted by the Stratbase ADR Institute for Strategic and International Studies (ADRi) last July 12, former associate justice Antonio Carpio stressed the importance of resuming the exploration of Recto Bank to prevent an energy crisis.
“We have no choice unless we want the economy to collapse,” he said. “If we cannot get the gas in Reed Bank, the government will become very unpopular because we’ll import LNG (liquefied natural gas) and our inflation rate will go up. Power rates will go up by 50%. It will be terrible.”
Carpio, who was an observer in the country’s legal team in The Hague, said that China has been intimidating the Philippines in the WPS to force the Marcos administration into giving up exploration of Recto Bank. He noted that this was the real point of the June 17 incident in Ayungin Shoal where the Chinese Coast Guard attacked Philippine Navy personnel on a resupply mission.
“They will succeed if we allow ourselves to be scared. Talo tayo (We lose),” Carpio stressed.
The former justice urged President Ferdinand Marcos, Jr. to start acting on the looming energy crisis, citing Malaysia and Indonesia which went ahead with oil exploration in contested waters despite China’s objections. He warned that inaction had political implications with “the Marcos dynasty on the line here.”
“The president must look at the 2028 elections because if he cannot solve this problem during the 2028 election, talo ‘yung kandidato niya (his candidate will lose). That will be the end of the Marcos dynasty,” Carpio pointed out.
Former President Rodrigo Duterte lifted the 2014 moratorium in 2020, but reimposed it in April 2022 on the urging of a Chinese official he did not identify. He tried negotiating an oil and gas joint development agreement with Beijing only to stop the bilateral talks two months later to prevent a violation of the constitution, leaving the unresolved issue to Marcos.
On the sidelines of the Stratbase ADRi conference, Philippine Navy Spokesperson for WPS Roy Vincent Trinidad told VERA Files that the Navy would do what it can to protect Recto Bank if exploration should resume.
“We are here to provide security. If given the guidance, then we’ll do what we can do… Pero ang decisions, wala naman sa amin,” he said.
In a panel discussion during the conference, Presidential Assistant for Maritime Concerns Ret. Gen. Andres Centino said efforts to improve military facilities in the WPS are ongoing.
“Funds have been released to make sure that we are able to provide the sufficient facilities for our personnel deployed in these areas,” he said.
Air Defense commander Fabian Pedregosa added that they are “fortifying” Pag-asa Island and will soon install “some equipment” to improve its “security and defense posture.”
Retired colonel Raymond Powell of the United States Air Force, however, noted that “timing matters” when it comes to unilaterally exploring resources in contested areas such as Recto Bank.
“Vietnam and Malaysia took advantage of an opportunity a decade ago in order to do their exploration and exploitation… but it is a much different matter now,” he said.
Powell argued that China’s forces in the WPS have increased to a point where “it will be a much, much more difficult proposition for the Philippines to start [oil and gas exploration] today.”
