Pangilinan-led PXP Energy Corporation is seeking the imprimatur of the Philippine government as to the next steps it must pursue relative to its joint exploration deal with China National Offshore Oil Corporation (CNOOC) for oil and gas exploration at the Recto Bank offshore northwest Palawan basin.
For the subsequent work program that will be submitted to the Department of Energy (DOE) for Service Contract (SC) 72, which is the license for the Recto Bank prospect, PXP Energy Chairman Manuel V. Pangilinan indicated that they will need to bring in a rig for the required drilling of wells at the block.
But he said it is not yet clear to them if they will need to have this next phase in the exploration and drilling activity sorted first with CNOOC before bringing in a rig at the site.
“We’ll identify the area where we can do drilling for exploratory wells. We probably need to do another survey, because typically the operator of the oil rig would need an updated survey of the underlying ground – the ocean floor, because we need stability in respect to where to put the oil rig,” Pangilinan said.
But before the decision on drilling is finalized, he indicated that the tricky concern they will need to deal with is how the memorandum of understanding (MOU) that they had with CNOOC in November 2018, will be treated or approached on following the lifting of the moratorium on exploration activities at the West Philippine Sea, which perceptively covers Recto Bank.
“The question is: what will China do? What will CNOOC do? Can we just send our oil rig without their permission or cooperation – that is something we are not aware of yet, we don't know yet,” the PXP chairman stated.
He said the company is currently in discussion with the Department of Energy (DOE) “with respect to the work program that we should submit to them and the budgeted amount for that work program.”
Pangilinan qualified that meetings are still ongoing with relevant DOE officials, thus, they cannot set definite timelines yet on when they will carry out the warranted extended seismic survey and the targeted drilling of two appraisal wells.
“Within the next few weeks, we should be able to finish our program which we should submit to the DOE for approval,” he stressed.
Prior to the enforcement of oil and gas exploration moratorium in 2013, the Pangilinan-led firm and CNOOC were on talks about planned “commercial partnership” for the Recto Bank exploration venture.
But developments stalled for years; and the MOU in 2018 was seen as a ‘breakthrough’; then the eventual lifting of the moratorium paved the way for renewed investment foray at the Recto Bank prospect.
Interest-holders in the block are betting on gas yield that could potentially match the commercial development success of the Malampaya field.
Based on previous data, it was noted that SC 72 prospect could yield up to 3.4 trillion cubic feet (TCF) gas-in-place; and the upside could reach as high as 20TCF gas-in-place.