PXP Energy Corporation in the Philippines has requested permission from the country’s Department of Energy to capitalise on the resource rich Malampaya gas facilities located in the South China Sea. However, Manila could also permit the company to exploit other gas prospects in the region, including the Sampaguita field located at Reed Bank, which lies in China‘s controversial waters claim known as the Nine-Dash Line.
Malampaya fuels power plants with a combined capacity of 3000 megawatts, but resources in the region are expected to become increasingly scarce over the next 10 years, sparking urgency from competitors looking to capitalise on the economic opportunity presented by the area.
A PXP spokesman said: “The project intends to ensure energy security to the country from indigenous natural gas resources for the next 25 years and beyond, while bringing in significant revenues to the Philippine government.”
While gas fields in the area are claimed by China, the Philippines has long disputed President Xi Jinping‘s audacious efforts in the South China Sea, alongside many other smaller nations such as Vietnam and Thailand.
Within the Nine-Dash Line the Spratly Islands also lie, and they form the heart of a complex dispute due to their location near coasts off Vietnam, the Philippines and Malaysia.
Manila has begun beefing up its defensive capabilities in recent months as a result of Chinese President Xi Jinping’s insistence on sending various vessels into Filipino waters.
National security adviser under President Rodrigo Duterte – Hermogenes Esperon – said: “Whatever we spend on defence should strengthen our position on developing our maritime domain especially the West Philippine Sea into what we call the blue economy.”
Mr Duterte said he has been offered a controlling stake in a joint energy deal by Xi Jinping in exchange for ignoring the international arbitration in Manila’s favour.
Recently, progress was made at the 35th ASEAN Summit in Bangkok, as China expressed openness to a new Code of Conduct.
Chinese Foreign Minister Wang Yi said the agreement was “an important step towards the goal of concluding the consultations within three years’ time”.
China may have appeared more diplomatic in last week’s summit, but increasing bravery from the Philippines will not be taken lightly in Beijing.