Spex has until October 2001 to decide whether it will directly get involved in the Fuga Island project. Spex is the license holder for the highly-successful Malampaya gas fields in Palawan.
The Fuga Island project is operated by a consortium composed of PNOC as operator with 78.75 percent interest and four Australian companies – Euro Pacific Energy (6.875 percent), Stirling Resources (6.25 percent), Hardman Resources (5.623 percent) and Nido Petroleum Philippines (2.5 percent).
Another seven percent equity window remains open for Fuga Island Holdings, Inc. (FIHI), the company of mega-millionaire Tan Yu, owner of the island. The Tan Yu Group entered into a compromise for the consortium to explore and develop what is perceived as a natural gas reserve in the Fuga Islands.
The consortium has unlimited access to the gas fields under Geophysical Survey and Exploration Contract (GSEC) 84 which covers approximately 830,000 hectares of predominantly offshore license acreage over the northernmost portion of Luzon and the Babuyan Channel. The initial project cost has reached over $4 million.
The Fuga Island project has an estimated five trillion cubic feet (TCF) of natural gas, which could provide power for a 5,000-megawatt (MW) combined cycle turbine power plant.
PNOC-EDC president Nazario Vasquez said they are willing to open an equity window for Spex equivalent to 25 to 50 percent of the 78.75-percent equity held by the government corporation.
"It is really up to them how much they want to be involved in," Vasquez added.
Spex officials confirmed that they were extremely interested in the Fuga Island gas fields but they did not confirm dishing out $1 million for the right to look into the fields.
Meanwhile, the capital outlay and exploration activities of PNOC-EDC have been badly affected by the depreciation of the peso forcing it to temporarily out on hold several of its exploration activities.
PNOC-EDC officials admitted that they have decided to concentrate on the Victorias natural gas exploration and commercial development project in Tarlac and the Fuga Island fields. The Victorias gas project is currently being pursued by the consortium of Anglo Philippine Oil and Mining Corp., Vulcan Industrial and Mining Corp., PNOC-Exploration Corp. and PNOC-EDC.– Ted Torres