Philex obtains relief on Recto oil drilling

Manila Standard Today

By Alena Mae S. Flores  Posted on Jan. 29, 2013 at 12:01am

The Energy Department extended the deadline for the work program of Forum Energy plc, a UK-based oil and gas exploration and production company, on service contract 72 covering the Recto Bank.

Forum Energy said in a report the department granted its request to extend the period for drilling appraisal wells in the contract by another two years.

“The deadline for completion of the second sub-phase, comprising the drilling of two  appraisal wells, has now been extended by two years to Aug. 14, 2015,” the company said.

Forum Energy earlier said in a statement it failed to get approval from the department to conduct the proposed work needed in the  work program. Forum Energy was supposed to conclude the drilling program on or before Aug. 14 this year.

SC 72 covers an 8,800-square kilometer area in offshore west Palawan. The SC 72 block is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.

Forum Energy, controlled by Philex Mining Corp., has a 70-percent stake in SC 72, while Monte Oro Resources and Energy Inc. holds the remaining 30 percent.

Philex Mining chairman Manuel Pangilinan said earlier any exploratory drilling this year under SC 72 would be “unlikely” and that the SC 72 concession would not meet the August 2013 work program deadline.

“Given that the weather window is March to April and it takes awhile to mobilize because under our work program, we need a survey first on site to determine the sea basin for stability for an oil rig…,” Pangilinan said.

He said Forum Energy’s work program remained dependent on sovereignty issues between the Philippines and China.

Energy Secretary Jericho Petilla earlier said the department might not clear Forum Energy to proceed with geotechnical studies of the Recto Bank until the Foreign Affairs Department gave the go-signal pending a territorial dispute with China.

“The DoE can only give permit based on certain limitations. The limitation of SC 72 is that is part of the dispute we have right now with China and because of that everything that we have to do on SC 72, we have to get clearance at DFA,” Petilla said.

Philex Mining owns 64.45 percent of Forum Energy through its interests in FEC Resources Inc. and Philex Petroleum Corp., while Atok-Big Wedge Co. Inc. holds 25.95 percent. The rest, or 9.6 percent, is owned by minority shareholders in the UK.   source