Philippine petroleum company PXP Energy Corp will take part in a government auction of energy reserves in the country's western and southern waters that are not claimed by China, its chairman said on Monday.
PXP Energy holds the rights to explore Reed Bank in the South China Sea, believed to be a resource-rich area which China claims as its own. Territorial disputes and legal disagreements have stalled PXP Energy's explorations for years.
PXP Energy Chairman Manuel Pangilinan said the company plans to instead to take part in an energy ministry auction announced in February covering eight projects.
It was hoped that Reed Bank, located near the western island province of Palawan, would replace the dwindling nearby Malampaya natural gas reserve which is forecast to run dry by 2027.
But then two former presidents enforced a moratorium on exploring the area from 2014 to 2020 after Chinese patrol vessels almost rammed a contracted survey ship in 2011.
PXP Energy later held talks with China National ƶijϻ Oil Corp to jointly explore the area but legal disagreements between the Philippine and Chinese governments strained the discussions.
"We hope China becomes a statesman in this situation. We are not a threat to them," Pangilinan said.
The Philippines is dependent on imported fuel to meet the needs of its 110 million people, making it vulnerable to global energy price shocks.
Since taking office in 2022, President Ferdinand Marcos Jr has pursued warmer ties with the United States, irking China which has become more aggressive in the disputed waterway, including using water cannons and military-grade lasers against Philippine vessels.
Pangilinan, the top Philippine executive of Indonesian tycoon Anthoni Salim, said he supports Marcos' actions with regards to the South China Sea dispute.
(Reuters - Reporting by Neil Jerome Morales; Editing by Kirsten Donovan)