MANILA, Philippines - Philex Petroleum Corp, the listed oil and gas unit of the Manuel V. Pangilinan business group announced a net loss of P1.086 billion in 2012, a turnaround from the P537.53 million it earned a year ago.

The 2012 losses were attributed to massive write-offs from investments in various oil and gas projects, while the 2011 gains were due to non-recurring income of P443.67.

In a disclosure to the stock exchange on Friday, February 22, Philex Petroleum said it wrote off P966.88 million in 2012, broken down as follows:

• P388.63 million of the investment made in an oil and gas project under Service Contract No. 40 (SC 40) where it has a participating interest through unit Forum Energy Plc
• P578.25 million of the assets in Brixton, a wholly-owned subsidiary that holds COC 130 (Coal Operating Contract) in Zamboanga Sibugay province.

These wiped out P191.00 million petroleum revenues from subsidiary Forum Energy, where it has direct and indirect interest of 60.49%, and P48.03 million coal revenues from Brixton.

“We will continue to focus on our goal of proving the commerciality of the potential hydrocarbon resources in the SC 72 contract area located at the Recto Bank," Philex Petroleum chairman and CEO Manuel V. Pangilinan said in a statement. He is referring to Service Contract No. 72, which grants them the right to explore oil and gas deposits in the disputed South China Sea (also West Philippine Sea).

"However, in pursuing such goal, we appreciate the significant challenges arising from the location of SC 72, for which the continued support of the Philippine Government remains a critical factor,” he added.

The Department of Energy has granted Forum a two-year extension to complete the exploration work commitment for the second Exploration Sub-Phase of SC 72. - Rappler.com