Philippines turns to US firms for South China Sea oil drills as Beijing tensions persist

Companies explore oil and gas projects in the country’s deep waters as Manila seeks to diversify its energy sources

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A drilling platform at the Kaiping South oilfield in the eastern part of the South China Sea. Photo: Xinhua

Published: 2:37pm, 17 Jan 2025

US companies are interested in oil and gas projects in the Philippines, Manila’s energy chief said, as tensions with Beijing hamper exploration in disputed areas of the South China Sea.

The projects that could involve American firms “are ultra deep within the archipelago,” Philippine Energy Secretary Raphael Lotilla said on Friday. He declined to name the companies pending firm commitments, but said some of them could be investors returning to the region.

“The American companies have assured us that their interest is driven by the economics and not by changes in political administrations,” Lotilla said.

The Philippines has been exploring ways to boost energy supply as its Malampaya gas field – which supplies a fifth of the country’s power requirements – nears depletion.

Tensions with Beijing have prevented Manila from exploring contested areas of the energy-rich South China Sea. Philippines-listed PXP Energy Corp.’s exploration work in the South China Sea’s Reed Bank has been stalled amid the maritime dispute, which has flared up again in the past weeks due to the presence of a huge Chinese ship near the Southeast Asian nation’s shores.

Malampaya’s service contractor last year said it was preparing to drill new wells to boost production. Drilling in nearby fields is set to start this year, and “by 2026 or 2027 we will have additional gas flowing from there,” Lotilla said.