PXP Energy Corp. seeks Department of Energy (DOE) approval on three service contracts (SC) for oil and petroleum in Northwest Palawan.
“We eagerly await the approval of three new service contracts in Northwest Palawan, Sulu sea and Recto bank areas. These contract areas will play an important role in revitalizing our petroleum operations and diversifying our asset portfolio,” said Daniel Stephen Carlos, PXP Energy president, during the company’s annual stockholders’ meeting conducted virtually yesterday.
Carlos said the service contract in Northwest Palawan covers the area that formed part of SC 6A plus an additional location to the east.
PXP Energy said its service contract application at the Recto bank is set for a new 2D seismic as well as marine gravity and magnetic survey while the one proposed in the Sulu sea offered by the DOE through a bidding in 2019 needs a reprocessing of its 3D seismic data.
Carlos said the company is preparing to drill an oil well in Palawan by the fourth quarter next year under SC6-B Bonita block.
“The initial phase will include the drilling of a well, Cadlao 4, to be followed by an extended well test (EWT). Based on the EWT results, a decision regarding full-field development, including the drilling of additional production wells, will be made. However, due to the current tight rig market, the drilling has been deferred from its original schedule this second quarter and instead, we anticipate drilling to start within the first quarter of 2024,” Carlos said.
PXP Energy also acknowledged the maritime dispute in the Wes Philippine Sea presents a “significant hindrance” to some of its service contracts.
“Nonetheless, we are currently engaged in active discussions with the government to explore the most effective approach for establishing the commercial viability of hydro-carbon resources within the contract area. Despite the challenges, we maintain a hopeful outlook that the moratorium on our two SCs will be lifted soon, enabling the resumption of exploration activities,” Carlos said.
PXP Energy holds a 50 percent interest in SC 75 in Northwest Palawan while Forum Energy Ltd. where PXP holds a direct and indirect interest of 79.13 percent, has a 70 percent participating interest in SC 72 also located in Northwest Palawan. Both areas are currently inaccessible due to the continuing territorial dispute with China.
The company had said it will continue to pursue exploration work with respect to its other projects in the Philippines, including SC 40 in Northern Cebu and SC 74 also located in Northwest Palawan.
