PXP Energy back to profitability with P14-M income

PXP Energy Corp., part of the Manuel V. Pangilinan-led group of companies, is back in the black with a P14-million consolidated net income for the first semester this year after a P56.3-million net loss in the same period of 2020.

This was achieved as a revenue surge partly offset a double-digit rise in costs and expenses.

In the first six months of 2021, consolidated petroleum revenues rocketed by 221 percent to P19.6 million from P6.1 million last year.

This was attributed mainly to a 250-percent year-on-year surge in the sale price of crude from the Galoc oil field, which reached $63.48 per barrel from $18.13 per barrel.

The higher price was only countered by lower output from Galoc, which yielded 222,038 barrels this year compared with 234,148 barrels previously. Galoc is covered by Petroleum Service Contract (SC) No. 14C-1.

At the same time, PXP’s consolidated costs and expenses jumped 38 percent to P54.4 million from P39.5 million.

Production costs in Galoc were down by 13 percent, but general and administrative expenses were up 72 percent.

Overseas, a PXP subsidiary in Peru, Pitkin Petroleum Z-38 SRL, is currently locked in a dispute with an operator-partner at the Peru Block Z-38. PXP said KEI (Peru Z-38) Pty Ltd. Sucursal del Peru, a subsidiary of Karoon Energy Ltd., failed to take any action to enter into the fourth period of the exploration phase under the license contract issued by the government of Peru. The consortium is supposed to drill the second exploratory well, but the license has already been terminated. Pitkin Petroleum is claiming damages of over $100 million for KEI’s alleged breach of obligation.

Back home, PXP has reaffirmed commitment to fulfill work commitments, mainly the drilling of exploration wells, under SC No. 72 that covers a prospect at Reed Bank as well as SC No. 75, which covers an area in the Northwest Palawan petroleum basin.

But while the Department of Energy has ordered a resumption of exploration in the West Philippine Sea, PXP has reiterated its concern about safety and security, considering the areas are part of a territorial dispute with China. —Ronnel W. Domingo