Philippines discovers new gas deposit near disputed South China Sea

Philippine authorities announced a significant natural gas discovery off the coast of Palawan province, potentially alleviating future energy concerns in a region where territorial disputes have complicated resource exploration.

President Ferdinand Marcos Jr. revealed Monday that the newly discovered Malampaya East 1 gas deposit, located approximately 5 kilometers east of the existing Malampaya field, contains an estimated 98 billion cubic feet of gas. Initial tests indicate the well could produce about 60 million cubic feet of gas daily.

“This helps Malampaya’s contribution and strengthens our domestic gas supply for many years to come,” Marcos said. “Aside from the natural gas, the discovery also includes condensate, which is a high-value liquid fuel.”

The find comes at a crucial time for the Philippines’ energy security. The existing Malampaya gas field, which began commercial production more than two decades ago, currently supplies over 20% of the electricity for Luzon, the country’s most populous island region and home to the capital Manila. Energy experts have warned that Malampaya’s reserves could be depleted within the next few years, raising concerns about a potential power crisis.

Marcos emphasized the significance of the discovery, noting that the gas field could eventually supply power to more than 5.7 million households or nearly 200,000 schools for a year. The president indicated that further testing and additional drilling would be conducted “to pursue more potential gas resources,” though he did not specify when commercial production might begin.

The president highlighted that Filipino workers led the drilling operations and completed the project without accidents or environmental incidents, underscoring the domestic expertise in energy exploration.

In 2023, Marcos extended an exploration contract for the Malampaya project by 15 years, signaling the government’s commitment to developing domestic energy resources. The new discovery could substantially extend the productive life of the broader Malampaya operation, potentially averting the predicted energy shortfall.

The gas field lies within the Philippines’ 200-nautical-mile Exclusive Economic Zone, where under the 1982 United Nations Convention on the Law of the Sea, the country has exclusive rights to explore and extract natural resources.

This location is significant given the complex geopolitical tensions in the South China Sea. While the Malampaya East 1 discovery is not directly in disputed waters, other Philippine efforts to explore for oil and gas in the nearby Reed Bank have been stalled for years due to opposition from China, which claims sovereignty over most of the South China Sea.

China has similarly opposed Vietnam’s oil and gas exploration in the region and has increased its military and coast guard presence in the disputed waterway in recent years. Malaysia, Brunei, and Taiwan are also involved in overlapping territorial claims in these strategically important waters.

The discovery represents a rare piece of good news for energy development in a region where exploration activities are frequently complicated by geopolitical tensions. For the Philippines, developing domestic energy resources is particularly important as the country seeks to reduce its dependence on imported fuels and secure its energy future.

Energy security experts note that natural gas plays a critical role in the Philippines’ energy mix, serving as a cleaner alternative to coal while providing reliable baseload power that can complement the country’s growing renewable energy sector.

The development of Malampaya East 1 could potentially encourage further exploration in Philippine waters, though activities closer to disputed areas will likely continue to face diplomatic and security challenges from competing claimants in the region.