The Philippines will bid three areas in the South China Sea for oil and gas exploration on Tuesday, two of them in disputed waters also claimed by China.

Reuterssaid 15 firms have pre-qualified for the bids including Nido Petroleum Ltd of Australia, Spanish energy company Repsol, French gas and power firm GDF Suez and Italy's Eni, although it is not clear if they will participate.

"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)," Jose Layug, an undersecretary in Manila's Department of Energy, was quoted as saying.

"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."

The report didn’t give comments from China.

China claims sovereign over almost the entire South China Sea while the Philippines, Vietnam, Taiwan, Brunei and Malaysia also claim various parts of it.

The report said the dispute between China and Vietnam and the Philippines has become Asia's biggest potential military flashpoint, with the three countries racing to grab possibly huge oil reserves.

It said the Philippines' Energy Department had prequalified more than 30 local and foreign firms to bid for 15 energy exploration contracts offered in the latest Philippine Energy Contracting Round.

The report cited officials as saying that bids for 12 of the 15 sites were opened in April, attracting mainly local firms. The other three sites includingforeign firms may show up at Tuesday's auction, officials said.

"We have received indication that at least two consortia have been formed with Filipino partners that will bid for the remaining three blocks," Layug was quoted as saying.

the report said the sites off the southwestern Palawan province, represented by service contracts (SC) 3, 4 and 5, are near the Malampaya and Sampaguita natural gas discoveries. Sampaguita is located near the Reed Bank, an area claimed by China.