Ayala offshore drilling deal gets extension
MANILA -The Ayala group’s Enex Energy Corp. will have an additional 18 months for its well drilling operations in offshore Palawan province while the area in the West Philippine Sea is currently inaccessible due to tensions with China.
In a stock exchange disclosure on Tuesday, Enex said the Department of Energy (DOE) had granted the request of its subsidiary, Palawan55 Exploration and Production Corp. (Palawan55), to extend the deadline to drill a well under Service Contract 55 (SC 55).
This gives Palawan55 a total of 23 months from the lifting of the force majeure status to drill the committed well.
The force majeure clause frees parties, in this case Palawan55, from liabilities when unforeseen circumstances arise and prevent them from fulfilling their obligations in a contract.
Earlier this year, the DOE granted force majeure relief to Palawan55 due mainly to “operational and financial risks associated with conducting drilling operations in the Service Contract 55 contract area in the West Philippine Sea.”
SC 55, which is estimated to have around 2.2 trillion cubic feet of gas, covers an area in offshore west of Palawan. It will be under force majeure status until the national government issues a clearance allowing the resumption of exploration activities in the highly contested West Philippine Sea.
This is not the first time that the DOE has put the SC 55 contract area under force majeure.
In 2021, the DOE granted the request of the SC 55 consortium, which is composed of Palawan55 and Pryce Gases Inc., for force majeure relief because of the COVID-19 pandemic.
