Philex eyes partners for Recto Bank project

By Neil Jerome C. Morales, The Philippine Star

Posted at Apr 27 2012 07:51 AM | Updated as of Apr 27 2012 06:12 PM

MANILA, Philippines - Pangilinan-led Philex Petroleum Corp. is in talks with foreign oil industry giants for the development of the resource rich Recto Bank in Western Palawan, the company’s top official said.

The oil and petroleum exploration is even willing to partner with a Chinese firm that could ease an ongoing dispute with China.

“We are talking about billions of dollars (of investments). You will need an international major. They have the expertise and the marketing power to place the gas,” said Philex Petroleum chairman Manuel V. Pangilinan.

“We have talked to a number,” Pangilinan said.

Exploration of the Recto Bank or Service Contract (SC) 72, which is near the contested Spratlys, is being conducted by Forum Energy Plc., a UK-based oil and gas firm controlled by Philex Petroleum.

Asked if the company is willing to talk to Chinese firms, Pangilinan said: “That is a solution. I think we should be talking to Chinese companies.”

Forum Energy said it needs around $75 million to continue with its drilling program for the Recto Bank, which showed a potential of producing 16.6 trillion cubic feet of gas.

“You will have to go to a consortium...It could be one or more oil companies that could get involved,” Pangilinan said.

The estimated resources are way above the 3.4 trillion cubic feet of gas in the Malampaya natural gas project in Palawan.

Energy Secretary Jose Rene Almendras said yesterday that resources in the Recto Bank could last as much as 100 years.

The project covers some 8,800 square kilometers in offshore West Palawan.

The second phase of the SC 72 drilling will start before June despite a territorial dispute between the Philippines, China, Vietnam and Taiwan for the resource-rich Spratly Islands in the West Philippine Sea (South China Sea).

“We would like to stick to the work program and schedule. We would like to be able to build the resources as soon as possible,” Pangilinan said.

However, delays might occur amid political tensions between the Philippines and China.

The rigs and survey ships are owned by other countries, which prefer not to be involved in any regional dispute, Pangilinan said.

Pangilinan said it takes six to 10 years to develop the area.

Last year, Philex Petroleum posted record-high earnings of P537.5 million on the back of petroleum sales and one-time gains.

The latest data showed that Philex Petroleum turned around to being profitable from incurring a comprehensive net loss of P111.69 million in the previous year.

Philex Petroleum, which listed in the local bourse by way of introduction in September, is the subsidiary of Philippines’ largest miner Philex Mining Corp.