Forum Energy in talks with potential partners for SC 72

MANILA, Philippines - UK-based Forum Energy Plc is pursuing talks with potential joint venture partners for the development of its Service Contract 72 (formerly GSEC 101) located in offshore West Palawan.

Forum Energy executive chairman Robin Nicholson, in a report, said the partnership will pave the way for the continuing development in the area.

Forum Energy has started seismic survey in SC 72 recently and had poured in an initial $10 million as part of its work program submitted with the Department of Energy (DOE).

Forum Energy earlier stressed that SC 72 is not situated in the disputed Spratlys group of islands, pointing out that said the contract is located in the Reed Bank basin.

According to Nicholson, Reed Bank is at least 150 kilometers east of the disputed Spratlys Islands and is closer to the island of Palawan.

SC 72 is within the 200 nautical mile exclusive economic zone (EEZ) based on Republic Act 9522 or the Philippine Archipelagic Baseline Law signed on March 10, 2009. RA 9522 defines the archipelagic baselines of the Philippines, while affirming Philippine sovereignty and jurisdiction over these areas which include SC 72.

Reed Bank has been subject of numerous exploration campaigns in the past under the Philippine contractual regime. The first petroleum contract in the area was awarded by the then Ministry of Energy in 1975.

“The company progressed discussions with potential strategic partners. A facility agreement with Philex Mining Corp. for $10 million has enabled Forum Energy to progress the development of its principal asset,” Nicholson said.

With the current rate the project is going, the company is expecting the survey to be completed within this quarter.

It would be recalled that Forum Energy implemented the first sub-phase work program which includes a further 550 square kilometer of 3D seismic and 2,200 kilometer of 2D seismic study in SC 72, covering 8,800 square kilometer s situated west of Palawan in the South China Sea.

The first sub-phase work program over SC 72 is estimated to cost $7.4 million.

The program is expected to result to a more comprehensive evaluation of the SC72 property and to identify potential sites for appraisal wells.

“The completion of our first sub-phase work program over SC 72 will be a milestone for the Company since the last data acquisition which was concluded over five years ago. We expect that this data will give us significant additional information that will enable the company to better assess the various development scenarios and potential partnership options for the SC 72 block at a critical time in the development of this important asset,” Nicholson said.

The company official said results from a 248-square kilometer 3D seismic survey in 2006 over the license area indicated a mean volume of 3.4 trillion cubic feet gas-in-place.