PXP Energy keen on Shell’s stake in Malampaya project

PXP Energy Corp., an oil and gas exploration company led by businessman Manuel Pangilinan, plans to bid for the 45-percent stake of Shell Philippines Exploration B.V. in the $4.5-billion Malampaya gas-to-power project in northwest Palawan.

“We are looking at it. We’ve been talking to JP Morgan who has been advising Shell on the sale of their stake in Malampaya,” Pangilinan, chairman of PXP Energy, said in a virtual briefing Monday.

Spex announced last month a plan to sell its 45-percent stake in Service Contract 38, or the Malampaya gas project.

Udenna Corp. and state-run PNOC Exploration Corp. owns 45 percent and 10 percent of SC 38, respectively. Udenna expressed intention to exercise preemptive rights and acquire the stake of Spex.

Meanwhile, Pangilinan said PXP Energy was preparing the work program for SC 72 (Recto Bank) following the government’s decision to lift the moratorium on oil and gas exploration in the West Philippine Sea.

PXP Energy received last week the “resume-to-work” notice from the Department of Energy in relation to SC 72 in northwest Palawan, while PXP’s subsidiary Forum Energy Ltd. also received a notice for its operating interest in SC 75.

“I think in the next few weeks, we will be able to finish our work program which we will submit to DOE for approval,” Pangilinan said.

He, however, expressed concern over the actions of China once PXP Energy proceeded with the work program.

Pangilinan said they might have to look at the work program in accordance with the memorandum of understanding signed by the Philippines and China in November 2018.

“We do have to speak to CNOOC [China National Offshore Corp.] and our government to the Chinese government,” he said.

“The question is what will China do? What will CNOOC do? Can we just send our oil rig without their permission or cooperation? That’s something we don’t know yet,” Pangilinan said.

PXP Energy and CNOOC were in talks for a possible joint exploration over the West Philippine Sea but the parties had not yet signed any agreement.

Pangilinan said PXP Energy would need to drill two exploratory wells in SC 72 which would mean deploying an oil rig to the area.

“We think probably [we] need to do another survey because typically the operator of the oil rig would need an updated survey of the underlying ground, the ocean floor…Then agree with DOE where to put the oil rig and where to put the exploratory wells,” he said.

PXP Energy’s shares soared last week, after the government lifted the moratorium on oil exploration in the West Philippine Sea.

The company reported a net loss of P56.4 million in the first half because of the decline in Galoc oilfield’s production.