Philippine upstream company PXP Energy Corporation is now coming to terms with the idea that the resumption of exploration at the Recto Bank prospect will rely on the political decision of the national government (NG), primarily considering the diplomatic alliances of the administration with global super powers.

When asked on any forward plan at their Service Contract (SC) 72 in the Recto Bank, PXP Energy Chairman Manuel V. Pangilinan asserted “that’s beyond our pay grade, that’s a government decision.”

He indicated that petroleum exploration activities at the diplomatically-strained West Philippine Sea may depend largely on the foreign relations being cemented by the country – especially that of the United States.

On the flip side, exploration and production (E&P) investors are also being perturbed as to how China will rise up if new seismic or drilling activities will be allowed by the government at the disputed territory.

“The question is: if we will be allied with the US, will they protect us? Can we now resume our work program? If we send our boats for drilling; I don’t know how China will react,” Pangilinan stressed.

Even the moratorium enforced by the government last year on PXP Energy’s exploration activities and drilling program has not been lifted so far by the Department of Energy.

The company deployed its vessels last year for planned extended seismic activities at its service contracts 72 and 75 along Palawan basin, but due to China’s protest, the exploration activity was called off on the request then of the DOE); and a "force majeure declaration" was subsequently enforced.

The Marcos administration gave pronouncements that it will fix the "problematic" investment policies in the upstream petroleum industry, but concrete resolution of this dilemma has yet to be presented by the government.

The DOE previously recognized the losses PXP incurred from its stalled seismic survey activities, and granted an extension on its work program at service contracts 72 and 75.

The Pangilinan-led firm has been raising to the government the "diplomatic concerns" hobbling its investment plan at the specified petroleum blocks, but China’s continuing aggression at the "territories of conflict" has essentially been stifling capital flow in the country’s E&P business segment.

The Recto Bank, in particular, is perceived as a gas-rich prospect, but the scale of reserves has to be confirmed by extended seismic survey as well as actual drilling of wells to verify its actual production potential.

However, targeted exploration activities in the petroleum block stagnated for roughly a decade already due to the unresolved territorial dispute at the West Philippine Sea.