Notify DOE of West Philippine Sea oil and gas exploration plans, firms told

Companies need to submit their work program to government regulators before undertaking any exploration activities in the West Philippine Sea, an official of the Department of Energy (DOE) said.

Energy Undersecretary Giovanni Carlo Bacordo said this policy is aligned with the government’s intention of maximizing indigenous resources in the country.

“We are saying that the latest standing order is that the moratorium has been lifted and they can go on with our oil and gas exploration activities,” said Bacordo on the sidelines of the Norway-Philippines Maritime and Energy Conference.

“The companies will have to manifest their intention, give us their timelines, give us their [work program],” he told reporters.

Previously, Manuel Pangilinan-led PXP Energy Corp. invoked force majeure on its two petroleum service contracts, Service Contract 72 and 75 effective April 6, “arising from what appeared as an indefinite suspension by the DOE of the exploration activities.”

PXP Energy and its subsidiary Forum Energy Ltd. made the decision as the DOE order prevented them from performing their obligations under these contracts.

As they did not receive any advice from the DOE, both firms were forced to stop all their exploration activities, constrained to terminate their agreements with suppliers and incurred substantial liabilities for termination costs and penalties.Recto Bank or SC 72, which covers the Sampaguita natural gas discovery, is located in the West Philippine Sea, west of Palawan and southwest of the Shell-operated Malampaya gas field. It is operated by Forum Ltd., a subsidiary of Forum Energy.On the other hand, PXP Energy is the operator of SC 75, which covers an area of 6,160 square kilometers in offshore Northwest Palawan.

PXP Energy holds a total economic interest of 54.36 percent in SC 72 and 50 percent interest in SC 75.

The listed firm had signified its interest in continuously coordinating with the government to resume activities both in its two petroleum blocks.

Yet, Bacordo said the proponent needs to inform the Department of Energy of when they intend to lift the force majeure declaration which the agency approved.

Amid security concerns, he assured the DOE will exert all efforts to ensure that “oil and gas exploration will proceed without any security impediments.”Bacordo however, did not outline the measures being undertaken to provide security for the companies intending to harness resources in the West Philippine Sea but only said the DOE is coordinating with other government agencies to secure oil and gas explorations. INQ