CNOOC a solid partner in Recto Bank - Philex

Manila, Philippines -  Pangilinan-led Philex Petroleum said state-run China National Offshore Oil Corp. (CNOOC) is financially and technically viable partner in the potentially resource-rich Recto Bank.

Philex Petroleum the oil exploration unit of top gold producer Philex Mining Corp., held meetings with CNOOC in Beijing last month, its top executive said yesterday.

“What we want to satisfy ourselves is their interest in Service Contract 72 and they expressed their interest,” said Manuel V. Pangilinan, Philex Petroleum chairman.

“And of course their financial and technical capability and from the looks of it, they do have the resources available,” he said.

Officials of Philex Petroleum and CNOOC met three weeks ago in Beijing, a meeting Pangilinan described as “cordial and “productive.”

Last week, Philex Petroleum announced it is open to partnering with anyone that can help exploit the potential resources of Recto Bank, which lies near the disputed Spratly Islands.

Its subsidiary, London-based Forum Energy Plc, through its 100-percent interest in Forum Philippine Holdings Ltd. and Forum Ltd., holds a 70-percent equity in SC 72.

Last month, Forum Energy revealed that the latest seismic survey on its offshore prospects in the Recto Bank showed the prospective resources could reach as high as 16.612 trillion cubic feet for natural gas and 416 million barrels for oil. The area is now believed to have 3.4 trillion cubic feet of gas and potentially 440 million barrels of oil – said to be bigger than the existing Malampaya gas field off Palawan.

Pangilinan said CNOOC is one of the largest companies in China, with revenues and profits reaching 250 billion renminbi and 67 billion renminbi, respectively, last year.

Pangilinan said the company is open to conducting more discussions with CNOOC.

However, Philex Petroleum has yet to firm up a farm-in deal with any potential partner.

Pangilinan said a number of non-Chinese firms have approached management for a partnership.

“Typically a gas field will need a major expenditure and the help of international oil firms that have the technical capability and the financial resource to develop a field of some size,” Pangilinan said.

SC 72 covers an area of 8,800 square kilometers.

“It is important, if not critical for us, to partner with one or more than one international oil companies. We cannot do this on our own,” Pangilinan said.

Philex Petroleum, which listed in the local bourse by way of introduction in September, wants to plans to drill two appraisal wells in the Sampaguita gas field until August 2013 that needs an investment of $75 million.

China maintains that the waters around the island have been a traditional Chinese fishery.

The Philippines, on the other hand, insists that the Panatag (Scarborough) Shoal is within its 200-nautical mile exclusive economic zone based on the UN Convention on the Laws of the Sea.