MANILA, Philippines - Upstream oil firm Forum Energy Plc will need an extended timeline for its $75-million exploration project in Northwest Palawan, a top company executive said.
Philex Petroleum Corp. chairman Manuel Pangilinan said the company exploring the potentially resource-rich Recto Bank has yet to receive an approval to conduct technical studies.
“We will asses to what extent we will need an extension. We will likely require an extension for the overall sub-phase 1 is due to be completed by August next year,” said Pangilinan.
Philex Petroleum, through subsidiary Forum Energy, plans to drill two appraisal wells in the Sampaguita gas field until August 2013 that needs an investment of $75 million.
London-based Forum Energy holds a 70-percent equity in the 8,800-square-kilometer service contract 72.
Pangilinan said that in July, Philex Petroleum sought for an approval from the Department of Energy (DOE) for a geo-technical ship exploration.
“We have written them again on Oct. 8 that we have not received their notice to proceed so it is still with them. We cannot proceed without their permission,” Pangilinan said.
The DOE requires oil firms to secure the government approval 90 days before the actual offshore exploration.
This allows the DOE to coordinate security and safety measures with the Philippine Coast Guard and the Department of National Defense.
DOE undersecretary Jose Layug Jr. said extensions are usually granted when there are force majeur events.
There are also cases when the exploration period is extended due to government in action, Layug said.
For the work program, Pangilinan said the company would hire an oil rig likely from Singapore.
Initial works will include a seven- to 10-day geo-technical drilling to determine the stability of the soil.
This is in preparation for the projected appraisal well drilling in next year, Pangilinan said.
Forum Energy earlier revealed that the latest seismic survey on its offshore prospects in the Recto Bank showed the prospective resources could reach as high as 16.612 trillion cubic feet for natural gas and 416 million barrels for oil.
The area is now believed to have 3.4 trillion cubic feet of gas and potentially 440 million barrels of oil – said to be bigger than the existing Malampaya gas field off Palawan.
In April, officials of Philex Petroleum and China National Offshore Oil Corp. (CNOOC) met Beijing to discuss a potential partnership in the potentially resource-rich Recto Bank.
Pangilinan said the decision to entertain a third party partner with an expertise in oil production would also depend on CNOOC.
China maintains that the waters around the island have been a traditional Chinese fishery.
The Philippines, on the other hand, insists that the Scarborough Shoal is within its 200-nautical mile exclusive economic zone based on the United Nations Convention on the Laws of the Sea.
To date, there are 27 service contracts in the Philippines involving Shell Philippines Exploration B.V. and Nido Petroleum. However, only the Malampaya and Galoc oil fields are in regular production.