MANILA, Philippines - Philex Petroleum Corp. has restarted talks with the state-run China National Offshore Oil Corp. (CNOOC) for a potential partnership in the resource-rich Recto Bank in Northwest Palawan.
The locally listed petroleum firm plans to invest as much as $70 million to drill two exploration wells in the disputed area in 2016, its top executive said yesterday.
“We’re considering how to mobilize in respect to the extension, how to mobilize the resources needed for the appraisal wells by 2016,” Philex Petroleum chairman Manuel V. Pangilinan told reporters on the sidelines of a forum organized by Philippine Long Distance Telephone Co.
“At the same time, we’re taking a parallel track in attempting to revive discussions with CNOOC,” Pangilinan said.
Last month, the Department of Energy gave Philex Petroleum’s subsidiary Forum Energy Plc another leeway to complete its obligation to explore Service Contract (SC) 72. Forum Energy was allowed to drill exploration wells until Aug. 15, 2016.
“We can [start exploration] but as you know, we are part of an overall broader geopolitical situation so we have to be sensitive to them,” Pangilinan said.
In April 2012, officials of Philex Petroleum conducted a meeting with government-owned CNOOC in Beijing.
Pangilinan said Philex Petroleum recently sent feelers in line with resuming discussions with CNOOC.
“We’re at the basement of the discussion. This will take a long while,” Pangilinan said, adding that both the Philippine and Chinese governments should agree with the partnership.
Philex Petroleum earlier announced it is open to partnering with anyone that can help exploit the potential resources of the Recto Bank, which lies near the disputed Spratly Islands.
“Even as a matter of courtesy, we should advise them that this is what we’re planning to do and so forth,” Pangilinan said.
Philex Petroleum allotted up to $70 million for the two exploration wells but partnering with CNOOC will fasttrack the development of SC 72 that covers an area of 8,800 square kilometers.
“They’re a fully-integrated oil company so they’ll bring the level of expertise we don’t have,” Pangilinan said, adding that CNOOC might also provide financing for project development.
In April 2012, Forum Energy revealed that a 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.
China maintains that the waters around the island have been a traditional Chinese fishery area. The Philippines, on the other hand, insists that the Scarborough Shoal is within its 200-nautical mile exclusive economic zone based on the United Nations Convention on the Laws of the Sea.