by Lenie Lectura, 06 March 2015
RISCO Energy Investments Pte. Ltd. remains on the lookout for an attractive investment in the Philippine energy sector, its top official said.
“We are still interested in the Philippines. We like the operating environment here. The procurement environment and operating environment are good and these are certainly key factors for Risco,” CEO Tom Soulsby said during a two-day conference on natural gas.
Risco earlier submitted an offer to buy Otto Energy Ltd. of Australia’s stake in Philippines’s Galoc oil.
In fact, an agreement was already prepared but was later terminated because Otto received a more attractive offer from Nido Petroleum Ltd., according to Soulsby.
“We had a very good experience when we were in Galoc,” said Soulsby, who added that the company would continue scouting for good investments in the Philippines.
“I think the main driver is quality project. I mean that’s the first driver. So, if there’s a good-quality project, why not?”
When asked if Risco is interested in Service Contract (SC) 55, which involves the Hawkeye-1 exploration well in southwest Palawan, Soulsby said “SC 55 is high risk.”
“Otto has it and we wish them the very best. We hope for the Philippines that it’s a major discovery but it’s not the sort of risk appetite that we have,” he added.
Soulsby explained the company is studying “the risk return of exploration versus return.”
“At the end of the day, the success rate for exploration is [in the] 10- to 15-percent zone. So you can drill 10 wells and not hit 10 values, that’s not the sort of risk that we want.”
The companies behind SC 55 include Otto Energy, whose interest in the project now stands at 33.18 percent; Otto Energy Philippines, 45 percent; 6.82 percent, Palawan Exploration and Production Co., a wholly owned subsidiary of Trans-Asia Petroleum Corp.; and PNOC-EC, 15 percent.
“Our appetite is more in projects and discoveries that are for commercialization. We don’t go for high-risk explorations yet. We are not big enough in terms of balance sheet; that’s really the domain of large and major oil and gas companies,” Soulsby said in Makati City.