PXP Energy told to resume oil search in Recto Bank

By Lenie Lectura October 20, 2020
https://businessmirror.com.ph/2020/10/20/pxp-energy-told-to-resume-oil-search-in-recto-bank/

PANGILINAN-LED PXP Energy Corp. received a notice from the Department of Energy (DOE) to resume exploration activi-ties in Recto Bank, following last week’s lifting of the force majeure imposed in December 2014.

“PXP just received today the ‘Resume-to-Work’ notice from the DOE in relation to PXP’s operating interest in Service Contract 72 [SC72]; while PXP’s subsidiary, Forum Energy Limited, also received today the Resume-to-Work notice from the DOE for its operating interest in SC 75,” PXP said Monday.

The development lifted PXP’s share price to P7.72 from P5.15 per share on Monday morning.

PXP Energy holds interest in SC 72 or the contract to explore Recto Bank in the West Philippine Sea through London-listed Fo-rum Energy Plc. It also has a direct operating interest in SC 75 northwest Palawan.

PXP and China National Offshore Oil Corp. (CNOOC) used to discuss a possible joint exploration of SC72 to develop a part of the Reed Bank.

However, a territorial dispute with China prompted the DOE to declare a force majeure on the license.

Later on, the Philippines won an arbitration case against China over the South China Sea. In particular, the Philippines has ex-clusive sovereign rights over the West Philippine Sea and that China’s nine-dash line is invalid, according to the United Nations Arbitral Tribunal.

Nearly six years later, the moratorium was lifted.

PXP President Daniel Stephen Carlos said Monday that the parties have yet to go back to the negotiating table.

“The parties are yet to agree on any disclosable definitive agreement. Hence, to date there are no disclosable information in re-spect of such ongoing negotiations, including the existence of such negotiations itself.”

Forum and CNOOC used to hold negotiations relating to the implementation of the Memorandum of Understanding on Co-operation on Oil and Gas Development between the Government of the Republic of the Philippines and the Government of the People’s Republic of China dated November 20, 2018.

Last Thursday, the DOE announced the lifting of the suspension of petroleum activities and the resumption of petroleum ex-ploration in the West Philippine Sea.

A “Resume-to-Work” notice was immediately issued to the Service Contractors doing petroleum-related activities in the areas of SC 59, 72, and 75 in the West Philippine Sea.

SCs 59 and 72 are operated by the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) and Forum Ltd., respectively. Meanwhile, PXP Energy Corp. operates SC 75.

“It’s a unilateral action on our part to ask licensees to start their activity,” said Energy Secretary Alfonso G. Cusi, adding that the lifting of the moratorium was arrived at in good faith and with full regard of the ongoing negotiations between the Philippines and China, and Forum Ltd. and CNOOC.

Under Republic Act 7638 or the Department of Energy Act of 1992, the DOE has the authority to regulate the exploration of the country’s indigenous energy resources.