Philippines to auction South China Sea exploration blocks

Philippine navy ship BRP Rajah Humabon leaves Subic Bay, the former US navy base, near the south China sea The Philippines has been building up its defence capabilities in the South China Sea

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The Philippine government is set to auction off three areas in the South China Sea for oil and gas exploration that are also claimed by China.

Several local and foreign companies are qualified to bid, including French energy giant Total, US-based Exxon and Royal Dutch Shell.

The Philippines is eager to reduce its dependence on imported energy.

However the waters, which are claimed by several other countries, are a source of tension in the region.

The blocks being auctioned are off Palawan province, near Malampaya and Sampaguita where natural gas was discovered.

That area, near Reed Bank, is also claimed by China.

"All the areas we have offered are well within the 200 nautical mile exclusive economic zone of the Philippines under the UNCLOS (United Nations Convention of the Law of the Seas)," said Jose Layug, an undersecretary in Manila's Department of Energy.

"Thus the Philippines exercises exclusive sovereign rights and authority to explore and exploit resources within these areas to the exclusion of other countries. There is no doubt and dispute about such rights."

China lays claim to a U-shaped swathe of the South China Sea - a swathe that overlaps areas claimed by the Philippines, Vietnam, Taiwan, Brunei and Malaysia.

There are thought to be significant oil and gas reserves below parts of the South China Sea subject to ownership disputes.

In recent years tensions over the issue have increased amid growing assertiveness from China over its maritime claims.

Ties between China and the Philippines are currently strained following a recent stand-off over another disputed area, the Scarborough Shoal.

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