US companies are interested in oil and gas projects in the Philippines, an energy official said in Manila, as tensions with Beijing hamper exploration in disputed areas of the South China Sea.
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(Bloomberg) — U.S. companies are interested in oil and gas projects in the Philippines, an energy official said in Manila, as tensions with Beijing hamper exploration in disputed areas of the South China Sea.
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The projects could involve American firms “deep within the archipelago,” Philippine Energy Secretary Raphael Lotilla said in an interview with Bloomberg Television’s Haslinda Amin on Friday. He declined to name the companies as firm commitments are pending, saying some of them could be investors returning to the region.
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“American companies have confirmed that their interest is driven by the economy and not by changes in political administration,” said Lotilla.
The Philippines has been looking for ways to improve energy availability as its key Malampaya gas field – which supplies a fifth of the country’s energy needs – is nearing collapse.
Tensions with Beijing have prevented Manila from exploring the contested territories of the energy-rich South China Sea. The exploration activity of PXP Energy Corp. listed in the Philippines in the South China Sea’s Reed Bank stands amid a maritime dispute, which has flared up again in recent weeks over the presence of a large Chinese ship near the coast of Southeast Asia. .
Malampaya’s contractor last year said he was preparing to drill new wells to boost production. Drilling in nearby fields will begin this year, and “by 2026 or 2027 we will have more gas flowing from there,” Lotilla said.
President Ferdinand Marcos Jr. this month he signed legislation aimed at boosting the natural gas industry, as the country tries to reduce its reliance on coal. The Southeast Asian country relies heavily on imported coal, oil, and gas, making it vulnerable to fluctuations in global prices that affect industrial energy costs.
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The country wants to increase the share of renewable energy in its energy mix to 35% by 2030 and 50% by 2040. .
“If the financial resources were there, we could go as the sky is the limit in terms of renewable energy,” said Lotilla. “The challenge is in the costs.”
Marcos, who takes office in 2022, has called on foreign companies to invest in his country’s renewable energy sector. The Philippines signed this week an agreement with United Arab Emirates-based Masdar for long-term renewable energy investment worth $15 billion.
Lotilla also said that the Philippines-US nuclear agreement that went into effect last year allows for the exchange of information and technology.
“That has enabled our private sector to now be able to communicate directly with American companies and discuss opportunities,” he said.
—Courtesy of Joanne Wong.
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