MANILA, Philippines — The consortium led by tycoon Manuel V. Pangilinan’s PXP Energy Corp. has handed back a petroleum service contract in Palawan to the government after failing to identify any drillable prospects in the area.
PXP told the Philippine Stock Exchange yesterday that the Department of Energy (DOE) authorized the surrender of Petroleum Service Contract (SC) 74 Linapacan, in which it has an operating interest of 70 percent.
Philodrill Corp. and PNOC Exploration Corp. (PNOC EC), respectively, own 25 percent and five percent of the consortium.
SC 74 is located in the shallow waters of the Northwest Palawan Basin and covers an area of around 4,240 square kilometers.
PXP, which informed the DOE of the consortium’s decision in December, said the latest development would “not have a material impact” on its financial statements this year.
Based on a notice of surrender, Energy Secretary Raphael Lotilla said the contractors still have an outstanding scholarship commitment under the DOE’s Energy Iskolar ng Bayan program.
“The DOE approves the contractor’s relinquishment of SC 74, subject to the settlement of the remaining scholarship commitment in the amount of $55,000,” he said.
The agency was said to have been finalizing the renewal of a memorandum of agreement with Palawan State University, the intended beneficiary of the scholarship commitment under the contract.
“The contractors are directed to abandon the contract area and restore all sites that may have been affected by any petroleum operations,” Lotilla added.
SC 74 was awarded in 2013 to joint bidders UK-registered Pitkin Petroleum Ltd. and Philodrill, with an operating interest of 70 percent and a participating interest of 30 percent, respectively.
In June 2015, Philodrill transferred its five percent participating interest to PNOC EC following a deed of agreement.
Pitkin, meanwhile, transferred its share and operatorship to Philex Petroleum Corp. (now PXP) in 2016. PXP currently holds a 100 percent controlling interest in Pitkin.
Last year, the DOE approved the work program for the contract area that included various strategic options for the Linapacan A and Linapacan B fields.
PXP was said to have programmed a multidisciplinary field evaluation consisting of a Phase 1 study, conducted from May to August 2023, and subsequent Phases 2 to 4.
According to PXP, the results indicate that Linapacan B is “uneconomic due to the marginal estimated oil-in-place volume, low API gravity and the high viscosity of the Linapacan B oil.”
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