Chinese companies express interest in RE collaboration

THE DEPARTMENT of Energy (DoE) said it is in official talks with China on possible areas of collaboration within the energy industry, after Chinese companies indicated their interest in investing in renewable energy (RE) projects.

“We’ve had discussions with the Ambassador of the People’s Republic of China on different aspects of cooperation in the energy sector,” Energy Secretary Raphael P.M. Lotilla said in a virtual briefing last week.

Mr. Lotilla said that in the past few months a number of companies from China have engaged with the DoE to declare their interest in investing in renewable energy (RE) projects involving offshore wind, solar and other technologies.

In November, the RE industry was opened up to full foreign ownership following a legal opinion issued by the Department of Justice, with Mr. Lotilla releasing a circular amending the implementing rules and regulations (IRR) of the Renewable Energy Act of 2008.

The law previously limited foreign ownership of RE projects to 40%, the constitutional limit for many industries.

The circular allows foreign nationals and foreign owned entities to explore, develop and use RE resources such as solar, wind, biomass, ocean or tidal energy.

Mr. Lotilla said that the Energy department is also keeping an eye on any possible breakthroughs regarding exploration activity in the West Philippine Sea.

“As far as joint exploration is concerned the Department of Foreign Affairs (DFA) of course takes the lead in the negotiations and any announcement in this regard will be coming from the President. We continue to work with all concerned regarding the prospects of developing the service contracts in the West Philippine Sea,” he said.

Mr. Lotilla said that the discussions on exploration are currently at a “delicate stage” but said the DoE remained engaged with all the other agencies involved.

Earlier this month, PXP Energy Corp. said it is time to resume discussions on the exploration in the West Philippine Sea and hopes that President Ferdinand R. Marcos, Jr., who is scheduled to visit China in January, could negotiate a suitable agreement.

PXP Energy said it wants to be guided by the government on its next steps regarding the development of the company’s service contracts in the disputed waters.

The oil and gas company’s subsidiary Forum (GSEC 101) Ltd., serves as the operator of SC 72 at Recto Bank. Within its block is the Sampaguita gas discovery, which is estimated to contain about 2.6 trillion cubic feet of contingent gas resources. PXP Energy also holds a 50% interest in SC 75 in northwest Palawan.

These areas are also claimed by China.

The DoE in April ordered the suspension of joint exploration activities in the West Philippine Sea due to the maritime dispute. This led to the suspension of all exploration work in SC 72 and 75.

In October, the DoE approved a declaration of force majeure covering the two service contracts in response to a PXP Energy request made in April.