PXP’s exploration activities in West Philippine Sea put on hold

Listed PXP Energy Corp. of Manuel V. Pangilinan has secured much-needed consolation from the Department of Energy (DOE) after its exploration activities in the West Philippine Sea were again put on hold early this year.

PXP said the DOE has granted the declaration of force majeure for Service Contract (SC) 75 and SC 72 from April 6, 2022 until such time it is lifted by the agency.

PXP, as operator under SC 75 and Forum (GSEC 101) Ltd, as operator under SC 72, have invoked force majeure following receipt of the DOE’s directive in April to “put all on hold all exploration activities for SC 75 and SC 72 until such time that the Security, Justice and Peace Coordinating Cluster has issued the necessary clearance to proceed.”

In a letter dated October 11, Energy Secretary Raphael Lotilla said PXP and Forum would ⁷be entitled to an extension of the exploration period under SC 75 and SC 72 corresponding to the number of days that the contractors actually spent in preparation for the activities that were suspended by the DOE’s suspension order on April 6.

Lotilla said total expenses amounting to $8.6 million for SC 72 and $5.18 million for SC 75 which were incurred as a result of the DOE directive to suspend exploration activities will also be part of the approved recoverable costs, subject to the agency’s audit.

PXP holds 50 percent interest in SC 75 located in Northwest Palawan.

Meanwhile, Forum Energy, in which PXP holds a direct and indirect interest of 79.13 percent, has a 70 percent participating interest in SC 72 located also in Northwest Palawan.

PXP has a total economic interest of 54.36 percent in SC 72.

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