Philippines halts exploration in 'disputed' sea: contractor


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The Philippines has suspended operations at a South China Sea natural gas project because it is also claimed by China and the dispute is before a UN tribunal, its contractor said Tuesday.
UK-listed Forum Energy said the Philippine energy department's order halted its exploration activities at the Reed Bank section of the sea, as of December 15 last year.
"Forum... today confirms that the Philippine Department of Energy has granted a force majeure on Service Contract 72 because this contract area falls within the territorial disputed area of the West Philippine Sea," said its mother firm Philex Petroleum.
The area "is the subject of an United Nations arbitration process between the Republic of the Philippines and the People's Republic of China", according to the Philex disclosure released by the Philippine Stock Exchange on Tuesday.
West Philippine Sea is the term used by Manila to refer to waters in the South China Sea that fall within its continental shelf.
China claims most of the South China Sea, which is believed to hold vast oil and gas resources -- even waters approaching the coasts of its neighbors.
The claim conflicts with those of the Philippines, as well as Brunei, Malaysia, Vietnam and Taiwan.
The Philippines last year filed a formal plea to the UN tribunal challenging China's claims.
China has refused to participate in the proceedings. The tribunal is expected to deliver a verdict next year, but lawyers say any ruling against China will not be enforceable.
Julius Cesar Trajano, a senior analyst at Singapore-based S. Rajaratnam School of International Studies, said suspending exploration was in keeping with the Philippine government's decision to resort to UN arbitration.
"It's a show that they are respecting the process," Trajano told AFP.
When asked about the ruling, foreign department spokesman Charles Jose referred to the UN Convention on the Law of the Sea.
"Philippine development activity (in the area) will take place in accordance with the national interest, following Philippine laws and in conformity with international law, including UNCLOS," he told AFP.
Forum is majority-owned by Philex Mining, the country's biggest mining firm. It estimates the undersea field contains about 73.6 billion cubic meters (2.6 trillion cubic feet) of natural gas.
It has drilled three exploration wells at the site since 2012, and had planned to drill two more this year.
All exploration work has since been suspended until further notice by the Philippine government, the company said.
Reed Bank falls within the Philippines' exclusive economic zone, as it is 245 kilometers (152 miles) northwest of the major western Philippine island of Palawan.
No reason was given for the long delay in announcing the suspension,

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