MANILA - The Philippines has suspended indefinitely all offshore oil and natural gas drilling activities at the Reed Bank off Palawan island in the South China Sea, London-listed Forum Energy Plc. said in a statement.
Forum Energy, an oil and gas exploration and production company with a focus on the Philippines, said in a statement dated Monday 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 South China Sea)".
The area is the subject of a U.N. arbitration process between the Philippines and China.
"Under the terms of the force majeure," the statement read, "all exploration work at SC 72 is immediately suspended (effective from 15 December 2014) until the Philippine Department of Energy notifies the Company that it may commence drilling."
"Further updates on SC 72 will be made as and when appropriate," it said.
In March 2011, the Philippine military said two Chinese gunboats "harassed" a Philippine-commissioned oil exploration ship in Reed Bank about 85 nautical miles from the nearest coast of Palawan that energy officials believe holds 3.4 trillion cubic feet of gas and 440 million barrels of oil.
The incident prompted the military to dispatch a bomber and light aircraft to the area.
President Benigno Aquino has stressed that Reed Bank is not part of the disputed Spratly islands in the South China Sea being claimed entirely by China, Taiwan and Vietnam and in part by Brunei, Malaysia and the Philippines.
But China, which claims almost the entire South China Sea, insists Reed Bank is within its sovereign territory.