ACEN to push SC 55 drilling, Net Zero plans this year

MANILA, Philippines — AC Energy will simultaneously push the drilling in Service Contract (SC) 55 offshore west Palawan and move forward with its net zero plans this year, its top official said.

“We expect to progress on both fronts in 2022,” ACEN Corp. president and CEO Eric Francia said in a text message to The STAR.

Listed oil and gas exploration and production firm ACE Enexor Inc. (ACEX), a subsidiary of ACEN, is targeting to drill an appraisal well in SC 55 this year.

“Enexor continues to work on SC 55 including partner related process,” Francia, who also sits as ACEX’s chairman and CEO, said.

In May last year, the Department of Energy (DOE) placed SC 55 under force majeure for one year, recognizing the adverse impact of the COVID-19 pandemic on the upstream industry.

This follows the request of Palawan55 Exploration & Production Corp., SC 55’s operator, to declare a one-year force majeure on the oil and gas prospect in view of the risks to the validity and optimization of a definitive drilling plan while the pandemic remains uncontained.

Palawan55 is 75 percent owned by ACEX and 25 percent owned by ACEN.

In April 2020, the DOE confirmed that “Hawkeye-1 well did encounter a significant volume of movable natural gas and is deemed to be a non-associated gas discovery under Section 13.02 of SC 55. Non-associated gas discovery means the reservoir contains only natural gas and no oil.

The DOE confirmed the entry of SC 55 into the appraisal period, premised on the drilling of at least one well within the first two years. SC 55 was estimated to have some 2.2 trillion cubic feet of gas, according to the DOE.

Three months later, the SC 55 consortium submitted to the DOE its five-year work program and budget for the appraisal period of $1.7 million.

The work program consists of a firm commitment in the first two years and a contingent commitment covering the latter three years.

“Meanwhile, AC Energy is also working on the Net Zero roadmap,” Francia said.

To allow ACEN to become a 100 percent renewables company by 2025, it will work on separating ACEX to become an independent entity.

ACEN is spinning off its all its thermal assets  via a property-for-share swap with ACEX for its thermal assets which include  Palawan 55, Bulacan Power Generation Corp.(BPGC), One Subic Power Generation Corp., CIP II Power Corp., and Ingrid3 Power Corp.

CIP II and BPGC respectively own and operate a 21-megawatt (MW) diesel plant in Bacnotan, La Union and a 52-MW diesel plant in Norzagaray, Bulacan, while OSPGC leases the 116 MW diesel plant in Subic Bay Freeport.

Meanwhile, Ingrid3 is planning to invest P25 billion to put up a 1,200-MW gas turbine power facility in Batangas City aimed to serve the power grid’s mid-merit and peaking requirements.