State-owned PNOC Exploration Corp. plans to start drilling in Service Contract 57 (Calamian) in northwest Palawan by the fourth quarter of 2021.
“On plan of PNOC-EC, our plan is to continue the 3D seismic study on SC 59 as well as farming out of SC 57, but we also plan to proceed in other areas were we have interest. And that’s SC 75 and SC 58. But right now, the thing we are interested in moving forward is SC 57 and SC 59,” PNOC-EC president Rozzano Briguez said during a Senate budget hearing.
Briguez said SC 57, located northwest of the Malampaya gas platform, had a strong potential for gas production that could secure the country’s energy requirements.
“I believe that it [SC 57] has more promise than SC 59, but only because we don’t have much data yet on SC 59. We also believe it has promise,” he said
“Our initial study is it’s approximately two-thirds of Malampaya, or about 1.8 trillion cubic of gas. Malampaya has 2.9 to 3.2 trillion cubic feet [of natural gas],” Briguez said.
He said PNOC-EC was planning to farm out part of its stake in SC 57, which was awarded by the Department of Energy on Sept. 15, 2005. It is located 50 kilometers northwest of the north-westernmost tip of Busuanga Island.
China National Offshore Oil Company International Ltd. signed a farmed-in agreement for SC 57 on April 3, 2006, acquiring 51-percent participating interest and operatorship, while Mitra Energy/Jadesone Energy secured a farmed-in deal on March 3, 2006 with 21 percent.
President Rodrigo Duterte issued Executive Order 80 last year which repealed former President Gloria Macapagal-Arroyo’s EO 556 requiring the company to conduct a bidding on oil and gas exploration ventures. PNOC EC is now back in control of SC 57.
Under EO 80, President Duterte allowed PNOC-EC to enter into farm-in/farm-out agreements.
“We will be farming out for SC 57. We own 28 percent but with new EO, we will be farming out 70 percent,” Briguez said.
“We are about to farm it out. The terms of reference are currently being validated by the DOE and then once that it is approved, we will farm it out and proceed and with the additional studies and the drilling for SC 57,” Briguez said.
“We are looking at our timeline. If we start drilling by 2021, hopefully in five years, we will go into production and that is 2026 or early 2027,” he said.
SC 57 was placed under force majeure amid the territorial dispute with China, but it can now resume operations following the government’s decision to lift the moratorium on oil and gas exploration projects in the West Philippine Sea.
Briguez said PNOC-EC met with the DOE and Western Command officials for the security arrangements following the lifting of the moratorium.
“We were given probably 30 days to submit our plans in proceeding forward, but they will also meet individually the other proponents,” he said.
The DOE awarded SC 59 to PNOC-EC on January 13, 2006. The area is located offshore southwest Palawan and north of the deep-water gas discoveries off Malaysia.
PNOC EC owns 100 percent of SC 59 after BHP Billiton withdrew its 75-percent interest in 2013.
Briguez said the country needs to increase oil and gas exploration activities to secure future energy needs.