PXP Energy finds dismal gas site in Palawan, drops project
Pangilinan-led PXP Energy Corp. has relinquished a contract to harness oil and gas resources in an offshore area northwest of Palawan after assessing it had no potential for further exploration.
The Department of Energy (DOE) approved the request of PXP Energy and its consortium partners The Philodrill Corp. and state-run Philippine National Oil Company-Exploration Corp. “to surrender” Service Contract (SC) No. 74 (Linapacan), which they held for almost 11 years but found “no drillable prospects.”
The area is situated in shallow waters northwest of Palawan covering 4,268 square kilometers. According to the DOE, it is found in the country’s “territorial waters.”
“This will not have a material impact on PXP’s 2024 financial statements,” said the listed firm, which also holds other service contracts that are under force majeure due to disputes in the West Philippine Sea.
As the operator, PXP Energy holds a 70 percent interest in SC 74. Philodrill owns a 25-percent stake while PNOC-EC holds the remaining 5 percent.
Aside from surrendering the petroleum block to the DOE, the firms agreed to dissolve their joint venture and operating agreement once remaining obligations are met.
In a letter, Energy Secretary Raphael Lotilla ordered the consortium “to abandon the contract area and restore all sites that may have been affected by any petroleum operations.”
The DOE said it would focus on exploration projects in the Bangsamoro Autonomous Region in Muslim Mindanao before assessing what to do next with SC 74.
Lotilla also ordered the entities to settle a scholarship pledge made by the partners amounting to $55,000 under the DOE’s Energy Iskolar ng Bayan Program.
“The DOE is currently finalizing the renewal of its memorandum of agreement with Palawan State University, the intended beneficiary of scholarship commitment under SC No. 74,” he added.
PXP Energy also holds SC 72 located in the West Philippine Sea, near the Malampaya gas field.
It also operates SC 40 (North Cebu Block) in the Visayan Basin covering the northern part of Cebu Island and the adjacent offshore areas in the Central Tañon Strait and Visayan Sea and SC 75 in northwest Palawan with an area of 6,160 kms.
Both SC 72 and SC 75 are currently suspended due to the sea dispute.
PXP’s move to drop SC 74 also comes on the heels of an unusual movement in its share prices last July 17, which the local bourse had flagged.
“Neither is the company aware of the existence of, nor does it possess, any undisclosed information that may have influenced the price of the company’s shares,” PXP had said.
