by Lenie Lectura, January 29, 2015
from BusinessMirror
THE Department of Energy (DOE) has approved the conduct of a geotechnical survey by UK oil and gas firm Forum Energy Plc. on the disputed Reed Bank area of the West Philippine Sea.
Manuel V. Pangilinan, chairman of Philex Petroleum Corp., said that even though there is a go-signal from the DOE, the company is still cautious on any future activities to be undertaken by Forum Energy, which is 60.45 percent owned by Philex.
“I believe so the DOE has approved [the survey], it still depends on whether China will allow it,” Pangilinan said. There won’t be any drilling activities during the conduct of the survey. China claims nearly all of the South China Sea (West Philippine Sea), while the Philippines and Vietnam, along with Malaysia, Taiwan and Brunei Darussalam, claim parts of it. The dispute has delayed the company’s plans to drill two appraisal wells.
Forum Energy has a 70-percent stake in Service Contract (SC) 72, an oil and gas-exploration permit covering the Sampaguita natural-gas prospect in the Reed Bank to the west of Palawan.
When sought for comment, Philex Petroleum President Carlo Pablo confirmed the DOE’s approval.
“The survey was approved by the DOE as part of work program for 2015 but still waiting for advice on schedule,” he said, who added that SC 72 remains a key asset of Forum Energy despite the setback.
The survey, which was supposed to be conducted in the second quarter of this year, will aid Forum Energy to determine which areas have strong potential for oil and gas. Drilling for appraisal is targeted to happen next year.
SC 72 covers an 8,800-square-kilometer area in offshore west Palawan. It is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
Pangilinan had said that as soon as arrangements are finalized, Forum Energy will advise the government and, as a matter of courtesy, China National Offshore Oil Co. Ltd., an upstream oil and gas firm owned by the Chinese government.
Forum Energy has recently obtained approval from the DOE to extend by one year the drilling of two appraisal wells to August 15, 2016.
It has also conducted a 3D seismic data covering 565 kilometers and 2D seismic data covering 2,202 line km in 2011 to further define additional leads identified within the SC 72 area, but has not been able to proceed with any exploratory drilling.
Appraisal wells are drilled to assess the size of gas or oil discoveries. An estimate of $60 million to $70 million may be needed to finance the drilling.
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