PANGILINAN-LED PXP Energy Corp. said its subsidiary and consortium partners have secured a brand new petroleum service contract from the federal 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 replica of the brand new Service Contract (SC) No. 91.
SC 91 covers an offshore area of about 103,034 hectares within the Northwest Palawan Basin and replaces the previous 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 could have missed a major volume of oil positioned higher within the reservoir structure, known as “attic oil,” which is now seen as a key goal for redevelopment.
The brand new contract was executed between the federal 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 an entirely owned unit of Forum Energy Ltd., through which PXP has an efficient 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 prolonged well test. Nonetheless, the spud date has been moved to 2025 attributable to a decent rig market.
Safety concerns over using a drillship in water depths of about 93.7 meters have prompted the operator to contemplate using a jack-up rig for drilling and testing. Nido is currently reviewing the contract for this feature, in keeping with its annual report.
In early 2024, the consortium submitted a letter of intent to the DoE to use for a development and production petroleum service contract, a brand new contract type for expiring blocks with ongoing production. The applying also covers additional open areas totaling about 1.03 million square kilometers.
Individually, PXP and its partners earlier secured a brand new contract to proceed producing oil from the Galoc Oil Field, also positioned in northwest Palawan.
The Galoc field has produced greater than 25 million barrels of oil since October 2008 and stays commercially viable despite natural production decline, with operations expected to proceed beyond the contract term, the corporate said. — Sheldeen Joy Talavera