PXP Energy invokes ‘force majeure’ in suspended Recto Bank exploration (Sabong News)

Pangilinan-led PXP Energy Corporation has affirmed declaration of force majeure on its programmed exploration activities at petroleum blocks in diplomatically-contested domains, including Recto Bank at the West Philippine Sea (WPS), following a recent order by the Department of Energy suspending its operations. PXP Energy said given the halted exploration activities, it had to resort to “force majeure” declaration for its Service Contracts (SCs) 72 and 75 off Palawan basin, “from what appeared as an indefinite suspension by the DOE of the exploration activities.” The company similarly stated that it was “constrained to terminate agreements with suppliers and incurred substantial liabilities costs and penalties” due to the very hasty government order to stop its oil/gas exploration and drilling program in the West Philippine Sea. Malacanang previously announced that the exploration activities of PXP Energy could resume at the two petroleum blocks once it secures clearance from the Security, Justice and Peace Coordinating Council (SJPCC), a government body that has been overseeing political, diplomatic and national security concerns. As of this week, however, PXP Energy indicated that it “did not receive advice from the DOE that they can resume their exploration activities.” The Pangilinan-led upstream petroleum firm emphasized that because of its stalled exploration activities at the West Philippine Sea on April 6 this year, such development caused it “substantial stand-by and other costs.” The Recto Bank, in particular, is seen as potential replacement for the Malampaya field given its gas-rich potential. Nevertheless, drilling activities have to be carried out to tangibly confirm the commercial viability of the petroleum reserves underneath. PXP Energy expounded it will “continue to coordinate with the government on the resumption of activities in both service contracts 72 and 75,” and will also pursue exploration work on its other awarded petroleum blocks covered by SC 40 and 74. Meanwhile, the company reported that it was able to trim its core net loss to P1.4 million in the first quarter of this year, an improvement from a heftier P5.6 million in the same period last year. On the revenue front, PXP Energy noted this reached P18.8 million within January to March this 2022 – and that came mainly from the lifting of 144,897 barrels of oil from the Galoc field – which had been subsequently sold at $78.1 per barrel. The petroleum company added its costs and expenses had been higher by 13.2-percent this year to P20.4 million from the year-ago level of P18 million within the comparative quarter.