PXP Energy gets new contract for Galoc project

PXP Energy Corp. has secured a new petroleum service contract that will allow continued oil production in the offshore Galoc field in Palawan.

In a disclosure on Tuesday, the Pangilinan-led firm said the Department of Energy (DOE) has transmitted the original copy of the executed Service Contract No. 88 (SC 88) to the field operator. This marked the contract’s officially taking effect.

The transmittal, dated Jan. 5, was issued for proper safekeeping and implementation.

SC 88 covers the Galoc oil field in offshore northwest of Palawan. It replaces the earlier SC 14C-1, which expired last Dec. 17.

The new contract allows the Galoc consortium to continue petroleum operations and pursue further recovery of remaining reserves in the area.

The new contract was executed on Dec. 18, between the Philippine government and the Galoc consortium.

The group comprises NPG Pty. Ltd. as operator, The Philodrill Corp. and Forum Energy Philippines Corp., a subsidiary of PXP Energy.

The concession covers an offshore area of about 83,450 hectares within the northwest Palawan Basin, a long-established oil-producing region.

The Galoc has been producing crude oil since 2008. It is considered one of the country’s key indigenous petroleum sources.

PXP Energy noted that Galoc is already a mature and depleting field. This is a risk that the firm has previously flagged to investors.

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Still, the company said the new SC provides a framework to extend operations and maximize value from remaining resources, subject to technical and commercial conditions.

The Galoc field has historically contributed to the country’s oil supply a modest but steady output.

The continued operations at Galoc helps support energy security efforts by reducing dependence on imported fuel. This even as production naturally declines over time.

PXP Energy said it will make further disclosures should any developments related to SC 88 arise.

PXP Energy is an upstream oil and gas company listed on the Philippine Stock Exchange, with interests in petroleum service contracts and exploration projects in offshore Philippine basins.