China, Philippines May Partner in Recto Bank Gas Project

China with its technological expertise in deep-water drilling may be the Philippines’ partner in developing natural gas resources in Recto (Reed) Bank despite the row between the two countries over Panatag Shoal, Philippines Star reported citing a report by Washington based Stimson Center.

Recto Bank,west of Palawan island is within the Philippines’ exclusive economic zone (EEZ) and surveys indicate it has huge gas deposits.

Philex Petroleum chairman Manuel Pangilinan made a recent trip to Beijing to talk with executives of the Chinese National Offshore Oil Corp. (CNOOC) about the possibility of partnering to develop gas resources in Recto Bank.

“Though Pangilinan said that CNOOC was only a potential partner and that Philex had not ruled out partnering with other foreign companies, CNOOC at least has a foot in the door for this type of project, and the added technological expertise of deep-water drilling can help their prospects while potentially setting a precedent for joint-development projects in other areas of the South China Sea,” the think tank report said.

The most difficult aspect of negotiation between Philippine and Chinese energy companies would be whether the terms of such an agreement were sufficiently balanced to avoid enflaming Filipino national sentiments.