Philex still keen on teaming up with China firm for SC 72

The group of Manuel V. Pangilinan is continuing talks with China National Offshore Oil Corp. (Cnooc) for a potential partnership at a massive but disputed oil and gas find in offshore Palawan.

Nonetheless, both parties have yet to move forward with their talks, which Pangilinan described as still in the preliminary stage given the geopolitical situation in the area.

Pangilinan chairs Philex Petroleum Corp., which is the controlling shareholder of Forum Energy Plc.  Forum Energy’s principal asset is Service Contract 72  Reed Bank, which contains the Sampaguita gas discovery.

“There are still ongoing discussions with Cnooc with respect to SC 72 but these are still preliminary and exploratory,” Pangilinan said at the sidelines of the stockholders meeting of Philex Petroleum this week. “We are hopeful talks will lead to something positive.”

Pangilinan added that his group was not in partnership discussion with any other party at this time.

SC 72 falls within the area of the South China Sea which is being claimed by China as part of its territory. Forum Energy was set to start its exploratory drilling program but sovereign claims by China and the Philippines have so far been a major stumbling block to this process.

Forum Energy eventually sought and obtained a two-year extension from the Department of Energy in the target implementation of the second exploration sub-phase of SC72 to August 2015.

Given uncertainties at SC72, Philex Petroleum is turning its attention to new petroleum blocks in offshore Palawan, designated respectively as area 4 and  area 5. Pangilinan, however, clarified that the company had yet to be officially awarded the right to explore and develop the areas.

Philex Petroleum president and chief operating officer Carlo S. Pablo said that once awarded, the company could proceed surveying the site, which typically takes two years.

Philex Petroleum owns 60.49 percent of Forum Energy, a UK-based upstream oil and gas company. Forum Energy holds a 70-percent interest in SC72. Monte Oro Resources and Energy Inc., led by businessman Enrique Razon Jr., owns the remaining 30 percent of SC 72.

The share price of Philex Petroleum, a subsidiary of Philex Mining Corp., declined by 1.48 percent to P20 per share on Wednesday. Philex Mining rose 2.31 percent to P14.20 per share.