MANILA, Philippines — Phinma Petroleum and Geothermal Inc. (PPGI) has completed the withdrawal of its interest in a petroleum block in northwest Palawan after securing government approval.
The company told the Philippine Stock Exchange yesterday that it relinquished its 14.063 percent participating interest in Service Contract (SC) 6 Block B in favor of its partners.
This was approved by the Department of Energy on Oct. 30, 2018, one year and eight months after the company notified the consortium of its plans to withdraw.
“The company believes that the remaining prospects in the block are either uneconomic or extremely high risk and, therefore, do not warrant further investments,” PPGI said.
However, the company retained its 2.475 percent carried interest in the block, which is a non-paying interest comparable to a royalty that shares in any production revenues.
This is “to ensure that the company will still benefit in the event of any commercial oil production in the area.”
Its other partners in the prospect include Philodrill Corp., Nido Petroleum Ltd., Oriental Petroleum & Minerals Corp., Forum Energy Philippines Corp. and Alcorn Petroleum & Minerals Corp.
SC 6 or the Cadlao prospect was discovered in the 1970s.
The field was flowing close to 1,000 barrels of light crude oil per day in 1991 when production was suspended to allow the transfer of its dedicated floating production facility to another field.
PPGI still owns 7.78 percent of SC 6 Block A. Last year, the consortium, which owns the prospect, proposed a work program to the DOE, which is composed of seismic interpretation and mapping and integration of quantitative inversion results that serve as input to preliminary well design and costs estimates.
Its partners include Pitkin Petroleum, Philodrill Corp., PetroEnergy Resources, Philex Petroleum, Forum Energy Philippines, Anglo-Philippine Holding and Alcorn Gold Resources.
PPGI previously relinquished its stake in an oil prospect. In May last year, PPGI also decided to give up its interest in Service Contract (SC) 51 in northern Leyte.
Following its withdrawal, the company will recognize a loss of P32.7 million for the write off of its share in the expenditures incurred to date under SC 51, which is equivalent to 22 percent of its total assets as of March 31, 2018.