Gov’t directs PXP Energy to start Recto Bank drilling

Published November 4, 2020, 3:21 PM

by Myrna M. Velasco

The Philippine government has directed Pangilinan-led PXP Energy Corporation to go ahead with its programmed seismic survey and well drilling at the Recto Bank even without securing first the concurrence of China National Offshore Oil Corporation (CNOOC) or that of the Chinese government.

Energy Secretary Alfonso G. Cusi

In a briefing with the media, Energy Secretary Alfonso G. Cusi qualified that the lifting of moratorium for oil and gas exploration at the West Philippine Sea had been enforced unilaterally, so there is no need for PXP Energy to secure any imprimatur from China or CNOOC on its work program for Service Contract (SC) 72 at offshore northwest Palawan basin.

“We’ve already given them (PXP Energy) instruction to resume work. They have submitted their work plan, so we will make them accountable to it and if they fail to do that, we will take the necessary action,” the energy chief stressed.

When asked repeatedly by reporters if there would be any need for the Pangilinan-led firm to secure China’s agreement or approval on the work plan, Cusi curtly interjected: “why?”

 Then he emphasized to the media that if PXP Energy would want to advance its negotiations with CNOOC on prospective commercial partnership for Recto Bank, then it is up to the company to decide on that.

“If they want to negotiate with CNOOC, they want to pursue it…they can do it by themselves, they can go ahead,” Cusi said.

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It must be recalled that back in November 2018, PXP Energy and CNOOC sealed a memorandum of understanding (MOU) for joint exploration venture at SC 72 – and that deal happened with the backing then of both Philippine and Chinese governments.

“I know they have been negotiating and that is not a precondition to them resuming their work. As I said, it would already depend on them if they would want to do that,” the energy chief reiterated.

In the recent moratorium lifting for oil and gas exploration in the so-called disputed territories of the West Philippine Sea, the energy department emphasized that such policy step was a sole decision of the government, therefore, investors in the upstream oil and gas sector will only need to take guidance from the Philippine leaders on how to move forward with their previously interrupted work programs.

For now, Cusi noted that the government’s expectation from PXP Energy is “they should start working. We have issued already the notice to proceed and they can do the work based on the work plan that they have submitted.”

PXP Energy already submitted its revised work program to the DOE; and key components of that would be extended seismic survey to identify the specific area for the deployment of drilling rig; then it has to commit drilling of at least two appraisal wells.

Prospective gas yield at Recto Bank is seen matching or even of heftier scale than that of the Malampaya field, but its commerciality can only be proven once targeted drillings are successfully concluded.