THE chairman of PXP Energy Corp. has described the reported memorandum of understanding (MoU) between the Philippines and China for the joint exploration in the South China Sea, or the West Philippine Sea, as “a small but significant step” in advancing the development of carbon resources in the area.
PXP Chairman Manuel V. Pangilinan cited media reports about the state dinner hosted by the Philippine President Rodrigo R. Duterte for his visiting Chinese counterpart Xi Jinping that also saw the signing of the MoU.
For his company, Mr. Pangilinan said the memorandum would have an impact on both China and Philippines, “particularly us” and the energy sector.
“I do hope that this could lead to some positive steps that we can take in respect of the work program that the group has presented to the previous government in respect of the exploration and development work,” he told participants of Meralco’s Technology & Innovation Summit 2018 at the distribution utility’s head office on Ortigas Ave.
Mr. Pangilinan said the memorandum would also have a “significant” impact on the petroleum downstream activities, the development of the planned gas terminal, a possible gas-fired power plant for Manila Electric Co. (Meralco), which he also chairs.
Last month, PXP Energy announced a partnership with businessman Dennis A. Uy’s planned liquefied natural gas (LNG) terminal and gas-fired power plant, which was prompted by the possibility that its own exploration project would successfully find natural gas.
Mr. Pangilinan had said Mr. Uy’s LNG project remains subject to a feasibility study, and that PXP Energy wanted an option into part of the equity.
“If SC (Service Contract) 72 is eventually proven to have gas, we could supply the gas to the gas terminal and to his gas plant. That’s the only motivation. If we don’t have the gas then maybe we won’t invest,” he had said.
Earlier last month, PXP Energy announced that Dennison Holdings Corp. would subscribe to shares in the listed company.
In turn, Mr. Uy’s Phoenix Petroleum Philippines, Inc. is granting preferential rights to PXP Energy to participate and acquire up to a 49% equity in the former’s project to build an LNG terminal and a gas-fired power plant with Chinese partner China National Offshore Oil Corp. (CNOOC). Dennison and Phoenix Petroleum are companies led by Mr. Uy.
PXP Energy had talks with CNOOC for the joint exploration of SC 72, although discussions had been put on hold because of the dispute between the Philippines and China on the area where the service contract is located.
PXP Energy has interests in various petroleum service contracts in the Philippines, including through subsidiary Forum Energy Ltd. The company holds a 78.98% controlling interest in Forum, a UK incorporated company with focus on the Philippines. The unit has a 70% operating interest in SC 72 in Recto Bank, which covers the Sampaguita natural gas discovery in offshore west Palawan.
Phoenix Petroleum in June signed a memorandum of understanding with CNOOC to develop a receiving terminal for imported LNG in the country. — Victor V. Saulon
