PXP Energy to pursue other oil, gas exploration projects
Listed upstream oil and gas firm PXP Energy Corp. and its subsidiary, Forum Ltd., will pursue other exploration projects in the country after the Department of Energy (DOE) ordered an indefinite suspension of exploration activities in two service contracts (SC) in the West Philippine Sea.
“Each of PXP and Forum will continue to coordinate with the government on the resumption of activities in both SC 75 and SC 72. Meanwhile, the group shall continue to pursue exploration work with respect to its other projects in the Philippines, including SC 40 and SC 74,” PXP said Thursday in a disclosure to the stock exchange.
PXP is the operator of SC 75 while Forum is the operator of SC 72. Last April 6, the DOE put on hold all exploration activities for SC 75 and SC 72 until such time that the Security, Justice and Peace Coordinating Cluster (SJPCC) issues the necessary clearance to proceed.
PXP and Forum advised the DOE last April 8 that they have suspended all activities in the West Philippine Sea. They are expected to incur “substantial stand-by and other costs.” They also told the DOE that they were prepared to resume operations immediately provided they receive written confirmation from the agency.
Since they did not receive advice from the DOE if they can resume their exploration activities, they have “stopped all their exploration activities, were constrained to terminate their agreements with suppliers and incurred substantial liabilities for termination costs and penalties, and affirmed their declaration of Force Majeure under SC 72 and SC 75 effective April 6, 2022 arising from what appeared as an indefinite suspension by the DOE of the exploration activities under SC 72 and SC 75.”
PXP Energy said this was the first time it learned of this requirement for clearance from the cluster before fulfilling the work obligations that the DOE has required.
SJPCC is composed of the Department of the Interior and Local Government, Department of Foreign Affairs, Department of National Defense, Department of Justice, and the Office of the Presidential Adviser on the Peace Process with the National Security Council as secretariat.
PXP also reported to the stock exchange that its core net loss was reduced to P1.4 million at end-March this year from P5.6 million in the same period a year ago. Consolidated net loss attributable to equity holders of the parent company stood at P2.7 million in the first quarter from P4.3 million in the first quarter of last year. PXP said this was mainly brought about by higher profit from Galoc operations and reduction in overhead.
SC 72 is within Recto Bank in the West Philippine Sea while SC 75 is in northwest Palawan.