(Bloomberg) -- The Philippines is working to explore other parts of the country that are potentially rich in oil and gas, according to an energy official, as talks with Beijing on joint resource development in the South China Sea are stalled by tensions between the two nations.

Manila cannot rely solely on the resources in Reed Bank in the South China Sea, where exploration by a Philippines-contracted group has been halted amid a lingering territorial dispute with Beijing, Energy Undersecretary Alessandro Sales said in an interview.

“We are looking at the Sulu Sea area as the new exploration hot spot and there are companies now involved here,” Sales said on Monday on the sidelines of an auction for new coal, hydrogen and petroleum contracts to boost energy supply. 

Israeli company Ratio Petroleum Energy LP, one of the contractors that will explore the area that’s within “internal waters,” is planning to send a vessel next month to collect 3D seismic data, Sales said. The undertaking, which may cost $10 million to $20 million, is part of the initial work before drilling, he added.

The Philippines is developing other energy sources as its key Malampaya gas field — which supplies a fifth of the country’s power requirements — nears depletion. PXP Energy Corp.’s exploration work on Reed Bank, another potential source for gas, has been suspended “because of the geopolitical situation,” Sales said.

Philippine President Ferdinand Marcos Jr. and Chinese President Xi Jinping in January last year agreed to resume joint oil and gas exploration talks in the South China Sea. In December, Marcos said talks were at a “deadlock” as tensions between Manila and Beijing escalated in contested waters.

“But we’re not sitting on our hands. That’s why we are actively doing this, to continue fostering and encouraging upstream exploration,” Sales said.

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