Mitra Energy to take over Exxon stake in Palawan venture

MANILA, Philippines - Mitra Energy (Philippines SC 56) Ltd. will take over the 50 percent stake of ExxonMobil Exploration and Production Philippines B.V. (EMEPP) in Service Contract 56 in Northwest Palawan, following EMEPP’s decision to pull out from the project and resign as SC 56’s operator.

Mitra Energy and BHP Billiton both have a 25-percent stake in the service contract.

Energy undersecretary Jay Layug said Mitra Energy may take in a partner after it assumes the shares of ExxonMobil.

Layug said Mitra Energy would have enough time to prepare for the new composition of the exploration project.

“Under the service contract, there’s a seven year exploration period and that was fast-tracked by Exxon so they have a lot of leeway in terms of period remaining for exploration,” Layug said.

The energy official also said the decision of ExxonMobil won’t affect government effort to promote upstream exploration activities in the country.

“I think, it’s very common in upstream petroleum that some fields are considered marginal, some fields are not considered commercial so this is one of them, especially since Exxon is a huge company, it has in terms of threshold for reserves, it has a higher requirement so unfortunately, this area does not meet their threshold,” he said.

Asked if ExxonMobil will totally pull out its operation in the Philippines, Layug said “Right now they are studying whether they will participate in PECR 4. It’s too near, especially since they are looking at the Sulu Sea area, so i’m not sure if they have enough time to participate in PECR 4 but certainly they said the Philippines is always an area of interest for them.”

ExxonMobil, the world’s largest publicly-traded international oil and gas company, earlier drilled four deep water wells at a cost of $400 million to explore for oil and gas in SC 56.