Forum Energy Plc of the UK, which is controlled by Philex Petroleum Corp., will likely seek another extension of the service contract covering the disputed Recto Bank in West Philippine Sea.
Forum Energy has not conducted a seismic study over the gas and oil-rich area yet, but its service contract is set to expire next year.
Philex Petroleum Corp. chairman Manuel Pangilinan told reporters Forum Energy was told by the Philippine government not to conduct any drilling or seismic study amid the tension with China over West Philippine Sea.
“We need to do the seismic first, before we can do the drilling. [We] have to establish that the ground where the platform will stand is stable,” Pangilinan said.
Philex Petroleum holds a 60.45-percent direct and indirect interest in Forum Energy, which in turn owns a 70-percent operating interest in SC 72.
The Energy Department earlier extended Forum’s exploration license by another year or until August 2016.
Pangilinan said China would not likely surrender its claim. “I don’t think China will give up its claim on sovereignty,” he said.
Pangilinan said Forum would also not give up its service contract because “I believe it’s ours.”
“It’s important that we do [ask for an extension],” Pangilinan said, adding that Philex Petroleum would likely report losses due to its inability to develop SC 72.
SC 72 covers an 8,800-square-kilometer area west off Palawan and is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
Forum Energy is supposed to conduct a geophysical survey in SC 72 this year to establish the baseline for the drilling sites and exploratory drilling by summer 2016.
“We don’t know whether things will change. We’re verbally told not to,” Pangilinan said.
Energy Secretary Carlos Jericho Petilla confirmed that the government had asked Forum to stop any physical activity in the disputed area this year. “We asked them to hold off, just for summer this year,” he said.
Petilla said it would take time for Forum to contract a drilling firm. He said despite the delay, the government still wanted to explore Recto Bank for resources.
“It should be explored, even the slightest chance, it’s still worth it to drill,” Petilla said.
Petilla said the Foreign Affairs Department, which was in charge of discussing the territorial dispute, was seeing some developments.
The Philippines is waiting for the ruling of the Permanent Court of Arbitration in The Hague, seeking to invalidate the claims of China in the South China Sea.
“According to DFA, there may be some developments if we can hold off to the drilling. Whether it’s really talks or something else, I don’t know. It’s possible that it’s only positioning because there is UN arbitration and there will be bad faith if we actually go into it,” Petilla said.