PXP Energy surrenders Linapacan block development

Pangilinan-led PXP Energy Corp. has surrendered to the government the service contract (SC) to explore and develop the Linapacan block in offshore northwest Palawan.

In a disclosure to the Philippine Stock Exchange, PXP Energy announced that the Department of Energy (DOE) approved the Notice of Surrender of SC 74 submitted by PXP Energy and its consortium partners The Philodrill Corp. and Philippine National Oil Company-Exploration Corp.

PXP Energy has 70% operating interest in SC 74.

“This will not have a material impact on PXP's 2024 financial statements,” the company said.

In a Notice of Surrender submitted to the DOE, PXP Energy and its consortium partners informed the Energy Department that there were “no drillable prospects identified in the contract area” which led them to “decide to surrender the service contract.”

The SC 74 (Linapacan block) is located in the shallow waters of the northwest Palawan region with an area of 4,268 square kilometers.

The contract was awarded in September 2013 to Pitkin and its consortium partner, Philodrill, through the Philippine Energy Contracting Round 4, with operating interest of 70% and participating interest of 30%, respectively.

In June 2015, Philodrill and PNOC-EC entered into a Deed of Agreement (DOA), whereby Philodrill transferred its 5% participating interest to PNOC-EC.

In February 2016, Pitkin transferred its share and operatorship of SC 74 to PXP Energy, then Philex Petroleum Corp., was approved by the DOE in April 2016.

In response to the consortium’s Notice of Surrender, Energy Secretary Raphael Lotilla said the DOE approved the relinquishment of SC 74 “subject to the settlement of the remaining scholarship commitment in the amount of $55,000.”

Lotilla noted that the contractors have an outstanding scholarship commitment under the DOE’s Energy Iskolar ng Bayan Program.

Nonetheless, the SC 74’s contractors were directed to abandon the contract area and restore all sites that may have been affected by any petroleum operations.

In the first quarter of 2024, PXP Energy booked a net loss of P2.61 million, narrower than the P6.08-million net loss seen in the same period last year.

Apart from SC 74, PXP Energy has 100% operating interest in North Recto Bank, 50% operating interest in SC 75, 40% and non-operating interest in Sulu Sea Basin.

It also holds 79.13% controlling interest in Forum Energy Ltd., which has 70% operating interest in SC 72 (Recto Bank). — RSJ, GMA Integrated News