The Reed Bank is an area west of Palawan and within the Philippines 320 km exclusive economic zone but its ownership however is disputed by the countries of China and Vietnam. Exploration of the Reed Bank has shown that it could contain about 3.4 trillion cubic feet of natural gas and 440 million barrels of oil. The area is much closer to the Philippine island of Palawan compared to the even hotly contested Kalayaan Island Group of the Spratlys.

Plans raised for the Philippines to mine the area of its energy minerals has resulted in China announcing its objection to the idea. Chinese Ambassador Liu Jianchao said yesterday that the plan is a violation of Chinese sovereignty, but he is confident that the matter can be settled through negotiations. He also said that unilateral economic activity is not allowed in areas subject of a territorial dispute.
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I chanced upon this article at the KPMG corner which touched on the topic of Oil Exploration in the Philippines, the author, Fernando Hernandez , pointed out that the Philippines potential for oil has not been really investigated, despite the fact that we have sedimentary basins located near oil rich territories of Indonesia, Malaysia and China. These can be found in 16 sedimentary basins covering an area of 700,000 sq km.

Since the start of oil exploration in the Philippines about a decade ago, 557 wells have been drilled with only 17 wells ever having commercially produced oil. Of those 17, only 4 wells are still pumping oil. Compare this to our neighbor, Indonesia, who drills about 400 wells a year. The Philippines drilling rate can be pegged at 1.6 wells per 1,000 square kilometers, compare this to the United States which drills about 1 well per 25 square kilometers.
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CBSNews reports that the US government is making moves to stop oil speculation. According to the report, the Commodity Futures Trading Commission (CFTC) is working on regulating oil speculators by setting limits on the amount of oil that they can hold and how long it can be held. Aside from that they are working to improve transparency in the process so it can be easily seen who is speculating.

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According to an article by Matt Taibbi in Rolling Stone Magazine, Investment bank Goldman Sachs is largely to blame for the oil price hike due to their machinations to drive up the price. This site has long suspected that speculators and not market demand and supply were what was causing the price of oil to go up.

And what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help — there were other players in the physical-commodities market — but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

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Exxon Mobil once again reigned supreme on the top of Fortune 500’s list of the most profitable companies for 2009. Exxon Mobile which was 2007’s top earner but fell to second spot in 2008, regained its position by beating Wal-Mart Stores. Other oil refiners joining them at the top 10 are Chevron (3), ConocoPhillips(4), Valero Energy(10) and Marathon Oil(23). All five of them have also been able to improve their standing as compared to their previous position in 2008’s list.

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Petron, recently acquired by Philippine food and beverage giant, San Miguel Corp (SMC), announced that their board has approved a revamp of its business to include energy generation and sale.
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