Philex to resume gas exploration at Reed Bank
MANILA, Philippines - After the Chinese intrusion into the Reed Bank near the disputed Spratly's area, the oil and gas unit of Philex Mining Corp. is planning to resume its exploration activities this 2012 to meet its schedule.
Philex chair Manuel Pangilinan said they are scheduled to drill 2 wells this year based on the work program they have previously submitted to the government.
"If the environment permits, meaning our ships and rigs are allowed to come in, then we will drill. So far it's been quiet, so we're assuming we can do our work. At the same time, we're committed to a work program with the government, so we really need to do it," Pangilinan said at the sidelines of the Manila Electric Co. Luminaries Event on Monday, February 6.
Pangilinan also noted that Service Contract 72 (SC-72) is within the Recto Bank and is not part of the contested Spratlys. "I'd like to think the Recto Bank is part of the Philippine territory, which is consistent with the Philippine Government's position," he said.
Philex Petroleum, a unit of Philex Mining, has a stake in Forum Energy, which was granted the SC-72 or the right to explore and eventually develop the oil and gas deposits in Reed Bank basin.
While the Philippines has insisted that the Reed Bank basin is within its sovereign territory, Chinese vessels have launched several attacks in the area in 2011, prompting the governments of the 2 countries to engage in high-level geopolitical negotiations.
At least 6 countries, including the Philippines and China, are claiming the supposedly oil-rich Spratlys area, which is near Reed Bank.
Energy Undersecretary Jose Layug Jr. earlier said they expect Forum Energy to drill one of 4 exploratory wells along the Recto Bank by this year.
Layug added that there will be around four wells to be drilled along the Recto Bank this year, and that the DOE is reviewing the seismic survey reports submitted by Forum Energy last year.
Results from a 248-square kilometer 3D seismic survey over the Service Conrtact 72 license area in 2006 indicated 3.4 trillion cubic feet gas-in-place at the Sampaguita gas discovery, which is part of the Recto Bank basin.
Forum Energy is 64.45% owned by FEC Resources Inc, a unit of Philex Petroleum.
Pangilinan said the exploration work between 2012 up to 2013 would entail a capital budget of $80 million, which will be funded through internally generated funds.
In 2011, Forum Energy entered into a $10 million facility agreement with Philex Mining to partly finance its work program. The work program includes 3D seismic work over an area of up to 550 square km over and around the Sampaguita gas discovery, and 2,200 line-km of high resolution 2D over existing leads within the 8,800 sq. km contract area.
Chinese exploration firms
Layug remains optimistic that there will be a "win-win solution" on "security issues" amid the claims involving Spartlys Islands and the Reed Bank.
"I'd like to believe that after all the pronouncements, there would be a win-win solution for this. We have invited Chinese exploration companies to come and join our public bidding so I don't anticipate there would be any problem," he said when asked about how government will handle the security issues in the said area. - Rappler.com