The Department of Energy (DOE) said it has already given go-signal on the targeted re-entry of state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) for oil and gas exploration at Northwest Palawan basin in a block covered by Service Contract (SC) 57.
Energy Secretary Alfonso G. Cusi said he conveyed the concurrence of the department on the plan of PNOC-EC for a fresh dive into its petroleum discovery journey in that specified acreage, which is in the north-westernmost tip of Busuanga island.
The state-run company is expected to resume its exploration activities at the block in partnership with China National Offshore Oil Corporation (CNOOC) which will be the operator given its 51-percent participating interest in the project.
PNOC-EC itself has 28% equity in the service contract; while Singapore-headquartered Jadestone Energy holds the balance of 21-percent working interest in the block.
SC 57 was originally awarded to PNOC-EC in September 2005. But in 2006, CNOOC farmed in into the block – which covers a total area of 7,200 kilometers.
Then in that same year, Mitra Energy (renamed Jadestone Energy) also entered into a farm-in deal with PNOC-EC for its 21-percent stake in the venture.
Nevertheless, firming up of the agreements stalled because of the issuance of Executive Order 556 by Arroyo administration in that same year, which precipitously prohibited farm-in and farm-out deals for state-owned company like PNOC-EC.
On that predicament, oil and gas exploration as well forward well drilling plans failed to advance in SC 57. And it was only in June last year that the Duterte administration issued Executive Order 80 to remedy the policy flaws sanctioned by EO 556.
It was emphasized by PNOC-EC that the deed of assignment for their re-entry into the block has yet to be signed by President Rodrigo Duterte.
“SC 57 is still under force majeure. Exploration activities will resume once approval from the Office of the President is granted,” the company said.
The petroleum block, as noted, straddles the Bantac 1 well, which is a non-commercial oil discovery by Occidental Petroleum when it did drilling in the area way back in 1994-1995.
SC 57 is among the three petroleum blocks that PNOC-EC is eyeing to revive its extended seismic survey and drilling activities on. The two others are Service Contract 59 in southwest Palawan and Service
Contract 37 in Isabela.