WEF: Philippine oil firm renewing talks with China to drill oil wells in disputed waters

A unit of Philippine firm Philex Petroleum is revisiting talks with Chinese state oil giant CNOOC to drill two oil wells in disputed waters in the South China Sea, its chairman Manuel Pangilinan said on the sidelines of the World Economic Forum on East Asia.

"We're starting to renew our channels with CNOOC," Mr Pangilinan told reporters after a WEF plenary session on the Philippines.

CNOOC is the Hong Kong-listed unit of China National Offshore Oil Company.

Mr Pangilinan said with the recent resolution of a dispute between Manila and Hong Kong over a hostage crisis in 2010, "there's a bit more reason to talk to us and see what we could do together".

Philex affiliate Forum Energy plans to drill two exploratory wells in its Sampaguita gas field in the oil-rich Reed Bank, near the disputed Spratly chain of islands in the South China sea.

Territorial disputes between the Philippines and China have hampered Forum's plan to drill the wells within the Service Contract 72 exploration permit awarded to it by the Philippine government in 2010.

In 2011, Chinese patrol vessels almost rammed a survey ship contracted by Philex in Reed Bank.

CNOOC in March turned down Forum Energy's offer to take the Chinese firm in as an investor.

Mr Pangilinan said even without a partner, Forum Energy would ask the Philippine government to extend its drilling permit, which expires in August next year.

"It takes 12 to 18 months to mobilise, so the earliest we can deploy an oil rig is March to May 2016," he said.

"It's been a while since we've done any work. The government may or may not approve it (extend Forum's permit), and we don't know how China will react," said Mr Pangilinan.