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- Recto Bank drilling likely to trigger oil exploration moratorium lifting
Recto Bank drilling likely to trigger oil exploration moratorium lifting
If interest-holders in Service Contract (SC) 72 at the Recto Bank in Northwest Palawan basin will get government imprimatur to resume with their planned extended seismic survey and drilling activities, this is seen as a major turning point for the Philippine government to prospectively lift petroleum exploration at the diplomatically-strained West Philippine Sea.
When asked on this, Energy Secretary Alfonso G. Cusi opined that “this move may help government to decide on the moratorium lifting.”
He said it could start with the SC 72 exploration, which is a tie-up between and among PXP Energy of the Pangilinan group, China National Offshore Oil Corporation (CNOOC) and Dennison Holdings of Davao businessman Dennis Uy.
Cusi qualified though that as far as the oil exploration moratorium lifting is concerned, he will always defer to the Department of Foreign Affairs for final go-signal, Manila Bulletin reported.
As a process, the PXP-Dennison-CNOOC consortium may apply with the DOE on the resumption of their exploration, then that filing will be referred to the DFA and the Office of the President.
And if the Recto Bank geological survey and drilling may finally advance, it is seen that the other areas within the West Philippine Sea may also be freed from the territorial shackle it had been enmeshed in the last 5 to 6 years.
PXP Energy’s (formerly Forum Energy) planned drilling of two wells at the Recto prospect had been interrupted since 2015 because of the Philippines territorial tussle with the Chinese government then.
The Department of Energy (DOE) indicated gas yield potential in the Recto block to be around 5-10 times the Malampaya field, but without drilling activities, it cannot be confirmed if output could really be on commercial scale.
On previous estimates set out by the United States Energy Information Administration (EIA), the oil yield potential could go as high as 5.4 billion barrels; while gas prospect had been pegged at more than 55 trillion cubic feet.
President Rodrigo Duterte previously set on the table a 60:40 royalty sharing arrangement with China on propounded joint exploration venture – which is the legally and commercially binding arrangements for service contractors in Philippine oil and gas resources.
That had been the same “commercial terms” accorded to the service contractors of the Malampaya project; as well as other current holders of petroleum service contracts (PSCs) – be it in oil or gas segments.