The president of the exploration arm of the Philippine National Oil Company (PNOC) said on Tuesday the company aimed to start an energy exploration venture with China National Offshore Oil Corp (CNOOC) in the South China Sea by 2021.
PNOC was awarded Service Contract 57 by the Department of Energy in 2005 covering the Calamian oil and gas prospect, near the Philippines' Malampaya natural gas discovery.
Service Contract 57 is among five Philippine exploration projects that can now proceed following President Rodrigo Duterte's decision to lift a six-year-old moratorium on energy-related activities in the South China Sea.
Based on initial studies, the prospect may have natural gas reserves equivalent to two-thirds of Malampaya's 2.9-3.2 trillion cubic feet, PNOC-Exploration President Rozzano Briguez told a senate budget hearing.
"By the fourth quarter next year we can start drilling, and if we will be lucky, by 2026 or early 2027, production will start for SC 57," Briguez said.
The Malampaya gas field in western Philippine waters, outside the disputed areas in the South China Sea, supplies fuel to four power plants that deliver about a fifth of the country's electricity requirements.
Malampaya is projected to dry up by 2027, based on the latest energy department projection. In 2006, CNOOC acquired a 51% interest while Mitra Energy Ltd [now Jadestone] took 21% in the Calamian prospect, leaving PNOC Exploration with 28%, but the deed of assignments remained pending at Duterte's office.
Energy Secretary Alfonso Cusi said in 2017 he had put forward the Calamian project to Duterte for approval. Last year Duterte issued an executive order removing the prohibition for PNOC to take in equity participants for its service contracts.
(Reporting by Enrico Dela Cruz, Editing by Ed Davies)