Pangilinan-led firm PXP Energy Corporation indicated that it already received formally the ‘resume-to-work’ notice form the Department of Energy (DOE), allowing it to recommence extended seismic survey and exploration activities at its Service Contract (SC) 72 within the Recto Bank area along offshore northwest Palawan.
The work resumption order, according to the company, similarly covers its Service Contract 75 that is also in northwest Palawan. This is its petroleum exploration venture in partnership with Yuchengco-led PetroEnergy Resources Corporation and state-owned Philippine National Oil Company-Exploration Corporation.
Following the government’s lifting of the exploration moratorium at West Philippine Sea last week and the subsequent imprimatur of the DOE that work can already restart, PXP Energy President Daniel Stephen P. Carlos indicated their company is also intending to revive its discussions with China National Offshore Oil Corporation (CNOOC) for possible joint venture in the Recto Bank upstream oil and gas investment.
In 2018, a memorandum of understanding was inked between PXP Energy and CNOOC for the SC 72 venture, but negotiations stalled because the government had not acted yet then on the lifting of exploration moratorium at the disputed territory in the West Philippine Sea.
Carlos qualified “the parties are yet to agree on any disclosable definitive agreement.” And at this point, he noted that continued negotiations have yet to be agreed on by Forum Energy, a subsidiary of PXP Energy; and that of CNOOC.
PXP Energy previously said if the Recto Bank block yields commercial find, it will need deep-pocketed and well experienced oil and gas industry player as its partner because aggregate investment in that prospect could go as high as US$5.0 billion to US$6.0 billion to bring it to production phase.
Prior to the enforcement of moratorium in 2013, the SC 72 of the Recto Bank petroleum block required its interest holder Forum Energy to drill two appraisal wells at the Sampaguita gas discovery in the next phase of its work program.
The scheduled work programs, including drilling and extended seismic surveys, will cost US$80 million, based on the company’s submission with the DOE at the time.
The potential of the targeted production field, according to PXP Energy, could run up to 2.5 trillion cubic feet of recoverable gas – which is very much comparable to Malampaya’s scale.
Aside from drilling, PXP Energy noted that they shall likewise be undertaking 3D seismic surveys for the North Bank prospect, which is located 60 kilometers north of Sampaguita.
Forum will also have to conduct geotechnical surveys over the proposed Sampaguita well locations to identify potential hazards and constraints on the seafloor where the offshore drilling rig will be located.
The Pangilinan group previously pleaded that “Forum and its third party contractors would need assurances from the Philippine government that any offshore exploration in the SC 72 area could be conducted without interference from domestic or foreign sources.”
The company recounted that when it was carrying out 3D seismic acquisition survey in 2011, “the said activity was temporarily suspended when two Chinese patrol vessels moved into the survey area and ordered Forum’s contracted seismic vessel to leave.”