I was surprised today to see my Philex holdings with a huge spike and it led me to the latest news of one of their subsidiary, Forum Energy Plc, through Philex Petroleum.
A news article is now at Reuters, excerpt below:
Manila's Philex finds more gas in South China Sea; may fuel China tension
(Reuters) - A natural gas discovery in a disputed area in the South China Sea contains more reserves than initially thought, a Philippine exploration firm said on Tuesday, with the new findings likely to further intensify territorial tensions between Beijing and Manila.
The Philippines' Philex Petroleum Corp said in a disclosure to the stock exchange that its Forum Energy Plc has a report that "is expected to show an improvement in the resources previously known" in the Sampaguita gas discovery in the Reed Bank, which the government calls Recto Bank.
Forum Energy had previously said that based on a 2006 study, the Sampaguita field had a potential of up to 20 trillion cubic feet of natural gas, or more than five times initial estimates.
It was in the Reed Bank where Chinese navy vessels threatened to ram a survey ship hired by Philex in March last year, sparking tensions that almost halted Forum Energy's work in the area. But Philippine military officials advised the firm then to continue with their job.
Philippine and Chinese ships remain locked in a standoff near the Scarborough Shoal in another part of the South China Sea for the third week running.
The Philippines insists the Reed Bank is well within its territory and not part of the disputed Spratly Islands in the South China Sea, believed to be rich in oil and gas and is crossed by important shipping lanes.
China claims ownership of the entire South China Sea, including the Spratlys which is claimed in whole by Taiwan and Vietnam and in part by Malaysia, Brunei, and the Philippines.
This is indeed a driving force for PX price. The positive outlook is that when such reserves are finally extractable and ready for commercial use just like the Malampaya project, Philippines's dependency to imported oil will be reduce thereby lowering fuel cost for industrial companies.
One factor though that is highly talk about now is the stand off between China and Philippines in regards to territorial disputes. With this latest news of discovery China would surely raise this issue again on the said Reed bank. Besides China and Philippines, other countries are claiming some parts of Spratlys and Scarborough Shoal because of the oil and gas finds in the said area. Energy is one of the high valuable commodity any country would like to have.
We hope the tension between China and Philippines could be work out to avoid military conflict and instead help one another to better benefit from these gas and oil sources.