South China Resources Inc. is a Filipino oil exploration company with diverse investments in banking, real estate and telecommunications. It is the largest single investor in Bell Telecommunications Philippines, one of the country’s biggest broadband telecommunications service providers.
The new contract consolidates South China’s exploration position in the east Palawan area where it currently holds another exploration contract immediately north of its newly assigned area.
Northeast Palawan is receiving serious attention from multinational and local oil exploration companies due to the area’s potentially huge petroleum deposits. Lack of quality data and more innovative working hypothesis on the emplacement of the north Palawan oceanic crust hampered previous exploration efforts. However, a joint investigation by South China and Comexco Inc., a technical consultancy firm, concluded the potential petroleum system in the area.
South China’s exploration area covers 1.3 million hectares in the strategic part of northeast Palawan where estimated potential for oil and gas deposits are into the billion barrel range. The area is right in the middle of the "Corridor of Focus" or priority exploration area near the Malampaya gas offshore infrastructure surrounding Palawan, Sulu Sea and off shore areas of Mindoro.
Northeast Palawan together with Cuyo islands is surrounded by positive hydrocarbon or oil deposit indications. The area’s marine topography varies from shallow water structural reefs to deep-water areas.
South China’s exploration contract was signed under the DOE’s "Window of Opportunity Program" which provides more attractive fiscal incentives to contractors. Among these incentives are accelerated depreciation, additional incentives for consortia with Filipino participation, option to transfer or suspend work obligations from existing contracts to "Corridors of Focus", cross cost recovery and flexibility in reducing government share for marginal fields and high cost frontier areas.