Pangilinan-led PXP Energy Corporation has formally secured the approval of the Department of Energy (DOE) for the relinquishment of its interest in a petroleum block in the Northwest Palawan basin that was previously awarded under Service Contract (SC) 74.

“The DOE has approved the surrender of SC74, of which PXP has an operating interest of 70 percent,” the company has stated in its disclosure to the Philippine Stock Exchange.

The company’s move on giving up the petroleum acreage, according to PXP Energy, will not have any material impact on its financial standing.

In its approval, the DOE conveyed that “the contractors have complied with their reportorial obligations.” Apart from PXP Energy, its partner-contractors have been Philodrill Corporation and state-run Philippine National Oil Company-Exploration Corporation.

Nevertheless, the agency qualified that the sponsor firms in SC 74 still have a “scholarship commitment under the DOE’s Energy Iskolar ng Bayan Program;” hence, they were made to pay $55,000 relative to that obligation.

“The contractors are directed to abandon the contract area and restore all sites that may have been affected by any petroleum operations,” the energy department stressed.

The petroleum block straddles an area of 4,268 square kilometers, and it lies within water depths ranging from 10 meters to about 200 meters.

As culled from the outcome of initial geological and geophysical studies, the prospects for discovery from the block should have been for commercial oil reserves.

According to PNOC-EC, about 1,600km of 2D seismic data covering the block was acquired through a multi-client seismic survey and had been correspondingly processed with gravity and magnetic data; and the interpretation of completed data was completed in 2017.

The Sub-phase 3 of the company’s work program no longer advanced because of the "force majeure" condition that had been enforced during the duration of the Covid-19 pandemic.