Philex Petroleum gets Palawan service contract

MANILA, Philippines - Philex Petroleum Corp., the oil and gas firm controlled by the group of businessman Manuel V. Pangilinan, has received from the Department of Energy (DOE) the petroleum service contract to operate a 616,000-hectare oil and gas field in Northwest Palawan.

A consortium led by Philex won Service Contract 75, referred to as Area 4, last year. Other members of the consortium are PNOC Exploration Corp., the exploration arm of state-owned Philippine National Oil Co., and PetroEnergy Resoures Corp.

The DOE awarded the contract for Area 4 under the fourth Philippine Energy Contracting Round for Petroleum or PECR 4, launched in June 2011.

The contract awarded to the consortium of Philex, PNOC-EC and PetroEnergy are among the five service contracts earlier offered by the energy department to local and foreign investors.

In April, Philex also announced that it has increased its stake in Pitkin Petroleum, a British power company.

Philex said it increased its stake in Pitkin to 50.28 percent from 18.46 percent with the additional shares acquired for $34.8 million.

Under PECR 4, the government offered more than 10 million hectares, some of which are located in the West Philippine Sea but the energy department said these areas are well within Philippine territory.

Aside from the Philex consortium, the other groups that won the contracts are Australian firm Planet Gas for Area 1 in Cagayan; Pitkin Petroleum and Philodrill Corp. for Area 5 in Northwest Palawan; Australian firm Otto Energy’s NorAsian Energy Philippines Inc., for Area 7 in Mindoro Cuyo, and Australian firm Loyz Oil for Area 14 in East Palawan.

Energy Undersecretary Ramon Allan Oca has said investments for these service contracts vary depending on their respective petroleum seismic studies.

He said the cost to drill a single well ranges from at least $5 million to $100 million.