PXPENERGY.COM.PH

PANGILINAN-LED PXP Energy Corp. said its subsidiary and consortium partners have secured a new petroleum service contract from the government for an offshore area in northwest Palawan, covering a previously expired block.

In a regulatory filing on Tuesday, PXP said the Department of Energy (DoE) has transmitted to the operator, Nido Petroleum Philippines Pty. Ltd., a copy of the new Service Contract (SC) No. 91.

SC 91 covers an offshore area of about 103,034 hectares in the Northwest Palawan Basin and replaces the former SC 6B, which expired on Feb. 28, 2024. The contract includes the Cadlao Oil Field.

The Cadlao field produced about 11.2 million barrels of oil between 1981 and 1991.

PXP said earlier seismic studies indicated that previous wells may have missed a significant volume of oil located higher in the reservoir structure, referred to as “attic oil,” which is now seen as a key target for redevelopment.

The new contract was executed between the government and a consortium composed of PXP’s indirect subsidiary, Forum Energy Philippines Corp. (FEPCO); Nido Petroleum; The Philodrill Corp.; Oriental Petroleum and Minerals Corp.; and Alcorn Petroleum and Minerals Corp.

FEPCO is a wholly owned unit of Forum Energy Ltd., in which PXP has an effective interest of 98.08%.

Nido Petroleum took over as operator of the block in 2022 and had planned to drill the Cadlao-4 well and conduct an extended well test. However, the spud date has been moved to 2025 due to a tight rig market.

Safety concerns over using a drillship in water depths of about 93.7 meters have prompted the operator to consider using a jack-up rig for drilling and testing. Nido is currently reviewing the contract for this option, according to its annual report.

In early 2024, the consortium submitted a letter of intent to the DoE to apply for a development and production petroleum service contract, a new contract type for expiring blocks with ongoing production. The application also covers additional open areas totaling about 1.03 million square kilometers.

Separately, PXP and its partners earlier secured a new contract to continue producing oil from the Galoc Oil Field, also located in northwest Palawan.

The Galoc field has produced more than 25 million barrels of oil since October 2008 and remains commercially viable despite natural production decline, with operations expected to continue beyond the contract term, the company said. — Sheldeen Joy Talavera

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