PXP Energy Corporation

'Compromise' needed before PH-China joint exploration: Palace

MANILA - Malacañang on Monday said a compromise must be reached before the Philippines and China can start to jointly explore and exploit a portion of the South China Sea.

Presidential Spokesperson Harry Roque earlier said the Philippines was considering at least two areas in the disputed sea for possible joint exploration with China.

The two service contracts are SC 57, which covers offshore northwest Palawan or west of Calamian islands, and SC 72, which covers Reed Bank, a large tablemount off Palawan being claimed by China.

Roque said negotiations are needed in order for the joint exploration in the potentially gas-rich Reed Bank to push through.

“In SC 72, you have to thresh out these details because it will have to be agreed upon,” Roque said in a news conference in Malacañang.

“That’s on the assumption that 72 is contested territory. Of course, our position is it’s part of our exclusive economic zone.; China claims the same way. And that is why if we enter into an agreement, we’ll have to spell out the respective rights and obligations of the parties by way of a compromise.”

SC 72 will be governed by international law “because there has to be a treaty to be signed between the Philippines and China,” Roque said.

SC 57, on the other hand, will be carried out under the guidance of Philippine domestic laws, since the area is not being claimed by China, he added.

Philippine oil and gas firm PXP Energy Corp, formerly Philex Petroleum, has a 70 percent interest through its Forum Energy subsidiary in the Reed Bank project.

Discussions on SC 72 hit a snag after then President Benigno Aquino III questioned the basis of China's claims before an international arbitration court in January 2013, a case that Manila won shortly after he relinquished power to President Rodrigo Duterte in July 2016.

Duterte refused to flaunt the ruling, choosing instead to repair diplomatic and economic ties with Beijing as he shifted foreign policy away from Manila's traditional ally, Washington.

Duterte’s push for a joint exploration between the Philippines and China has been criticized by some, including Supreme Court Senior Associate Justice Antonio Carpio who said China will have to recognize the Philippines’ exclusive rights to exploit resources within its 200-nautical mile exclusive economic zone if Beijing wants to enter into a joint deal with Manila.

"They will agree on the commercial issues because you will just follow the industry rate and you cannot go wrong there. The stumbling block has always been insistence of China that we recognize that they have sovereign rights," Carpio told ANC's Headstart.

"We cannot do that anymore because there’s already a ruling and the Constitution says the State shall protect its marine wealth in its exclusive economic zone…and reserve its use and enjoyment exclusively for Filipino citizens," he said.

Jay Batongbacal, director of the University of the Philippines' Institute for Maritime Affairs and Law of the Sea, also warned that a joint development venture with China in the Recto Bank, which lies within the West Philippine Sea, may legitimize Beijing's claim in the disputed waters.

"We have a clearly legitimate claim, which has been validated by nothing less than the international tribunal. There is supposedly no overlap, and yet China continues to insist on its illegitimate claim," he told ANC's Early Edition.

"By accepting joint development, in essence we are accepting that illegitimate claim might have some currency, might have some substance to that," he said.


MVP sends 'feelers' to China National Oil for joint exploration talks

MANILA - PXP Energy said Thursday its chairman, Manuel Pangilinan, had sent "feelers" to China National Offshore Oil Co for possible joint exploration in the South China Sea.

Pangilinan is "hopeful" that the Department of Energy would allow work to resume in the area covered by PXP Energy's service contract, the company told the stock exchange, clarifying a Philippine Star report.

Survey work can start as soon as the Philippines and China agree on a protocol for joint exploration, Pangilinan was quoted as saying in the report.

Negotiations between PXP Energy, then known as Philex Petroleum, and state-run CNOOC stalled after the government of then President Benigno Aquino III in 2013 contested the validity of Beijing's sea claims before a United Nations-backed tribunal.

The Hague-based Permanent Court of Arbitration ruled in favor of the Philippines in 2016, shortly after Aquino's successor, President Rodrigo Duterte assumed office.

Duterte refused to flaunt the ruling and instead sought closer diplomatic and economic ties between the Philippines and China.


Forex gain narrows PXP Energy net loss  

PXP Energy Corp. narrowed its consolidated net loss to P8.4 million in the first quarter of 2018, compared with P8.5 billion a year ago, because of a foreign exchange (forex) gain of P15.5 million.

This gain was lower than 2017’s P1.7 million, the Pangilinan-led upstream oil and gas company said in a disclosure late last week.

Other charges amounting to P11.9 million and a P1.6-million provision for income tax offset the net loss, it added.

Consolidated net loss attributable to equity holders of parent firm Philex Mining Corp. decreased to P3.7 million from P5.3 million last year.

Consolidated petroleum revenues increased to P30.7 million from P26 million, credited on the 24-percent improvement in crude oil prices, which offset production that fell by 3.4 percent.

Consolidated expenses rose 12 percent to P41.5 million than P37 million last year on the back of a higher depletion cost that was offset by overhead containment.

Formerly Philex Petroleum Corp., PXP Energy was incorporated in December 2007 as a wholly-owned subsidiary of Philex Mining.


...nakow loss

PXP Energy net loss widens to P32.8M

PXP ENERGY Corp. reported on Thursday a consolidated first-half net loss of P20.1 million attributable to equity holders of the parent firm, or bigger than the P11.3 million if incurred in the same period last year.

The company told the stock exchange its reported consolidated net loss hit P32.8 million during the period, an expansion from the P17.2 million in the same six-month period last year.

Consolidated petroleum revenues rose by 27% to reach P66.7 million from P52.6 million a year ago resulting from a 33% improvement in crude oil price offset by 2% lower crude production.

The company said consolidated cost and expenses increased by 42% to P110.5 million from P77.8 million a year ago “brought about by higher depletion cost in Galoc and the decommissioning of Tara and Libro wells in Service Contract 14, offset by continuous containment of group overhead.”

The company said the net loss of P32.8 million was due to higher depletion cost and decommissioning, other charge of P11.9 million, and a provision for income tax of P1.6 million. This was offset by a foreign exchange gain of P23.3 million.

PXP Energy also said that Forum Energy Ltd., a 78.98%-owned subsidiary, will take guidance from the Philippine government in respect of any future activity in Service Contract (SC) 72 and SC 75.

“The Company is mindful that the Malampaya gas resource, which supplies about 40% of Luzon’s power requirements, could be exhausted within the next decade; in that light, resumption of exploration in SC 72 is in the national interest. The Company remains hopeful that the force majeure imposed on SC 72 and SC 75 will be lifted by the Department of Energy soon for the Company to be able to resume exploration works in these SCs,” the company said.


...kaya humataw 'to pati APX kahapon eh

3 senators back 60-40 sharing in PH-China sea exploration  

THREE senators allied with the administration on Wednesday expressed support to the 60-40 sharing scheme in the joint exploration of natural resources in the South China Sea (West Philippine Sea) with China.

When asked if the 60-40 sharing plan announced by Foreign Affairs Secretary Alan Peter Cayetano is acceptable, Senate President Vicente Sotto 3rd said, “Yes it is.”

“It means China is accepting the fact na lamang tayo [that we have the edge],” Sotto said in a text message.
Senate President Pro Tempore Ralph Recto said, “Well, that sounds good to me. I hope it’s true.”

Sen. Panfilo Lacson said the deal is “more than acceptable as the 60-40 ratio complies with the requirements of the Philippine Constitution on foreign investment.”

“It is practical and sensible to enter into a joint exploration with China,” the senator added.

“First, we do not have the resources nor the technology to do it alone. Second, the West Philippine Sea is so rich in oil and natural gas and it is time to make use of these natural resources to uplift the lives of our people,” he said.

Lacson added, “It could also provide us the wherewithal to pursue massive infrastructure development to further enhance investments.”

Sen. Aquilino Pimentel 3rd said, “The specific area must first be divulged before I can comment.”
Sen. Risa Hontiveros described the scheme as “preposterous and treacherous.”

“It reverses our historic victory at The Hague and signs away Philippine sovereignty in the West Philippine Sea,” she said.

Hontiveros added that the DFA’s plan is absurd as it recognizes China’s claim and ownership over the West Philippine Sea and nullifies the decision of the Permanent Court of Arbitration (PCA) upholding Manila’s sovereign rights in the area.

“Is this the result of the DFA’s so-called 50-100 diplomatic actions against China? Is this what President Duterte calls an independent foreign policy?” she asked.

The opposition senator said that in case the DFA failed to read the ruling, the UN decision “is very clear.”

“We have sovereign rights to access offshore oil and gas fields, including the Reed Bank, within our 200-mile exclusive economic zone,” she added.

‘We don’t share ownership of the West Philippine Sea with China,” Hontiveros said.

She challenged the DFA to junk the planned joint exploration with China and focus on ways of enforcing the UN ruling on the West Philippine Sea.

“The people want a DFA that is courageous in asserting our historic victory at The Hague, not a Foreign Affairs office that the public can’t distinguish anymore from the Chinese Embassy,” Hontiveros said.


MANILA-- President Rodrigo Duterte has approved the establishment of a technical working group (TWG) on the Philippines-China joint exploration in the disputed West Philippine Sea, Foreign Affairs Secretary Alan Peter Cayetano said Tuesday.

"I just got his approval in principle, but I can tell you that the areas where I want to have experts at the highest level, meaning we have Cabinet level," he told a press briefing in Taguig City.

For the environment, Cayetano said the TWG will have representatives from the Department of Environment and Natural Resources; for oil and gas, the Department of Energy; for security, the Department of National Defense, National Security Council, National Intelligence Coordinating Agency and the Department of the Interior and Local Government.

There will also be a legal team, composed of the Department of Justice and the Office of the Solicitor General to advise and help in the negotiation stage.

Chinese President Xi Jinping may visit the Philippines by yearend, Foreign Secretary Alan Peter Cayetano said on Tuesday, as relations between the once hostile Asian neighbors have improved.

“We’re now fixing the date. We’re looking at the latter part of the year,” Cayetano told reporters. “Both sides wanted it to happen.”

...balitang subsidiary lang ng PXP, not the main company Smile

PXP Energy says force majeure lifted from Peru oil exploration block

PXP ENERGY Corp. said an exploration block in Peru in which a subsidiary has participating interest had been removed from its force majeure status after recent changes in the hydrocarbon law in the foreign country.

In a disclosure to the stock exchange on Tuesday, the company cited a corporate update from Karoon Gas Australia Ltd., an international oil and gas exploration company with projects in Australia, Brazil and Peru.

“Karoon has been positively impacted by recent changes to the hydrocarbon law in Peru, which has resulted in force majeure being lifted from Block Z-38. Karoon has been actively working with the Peruvian authorities with this outcome in mind, and considers these changes as a step forward for exploration in Peru,” the Australian company said.

PXP Energy holds a 53.43% controlling interest in Pitkin Petroleum Ltd., an upstream oil and gas company registered in the United Kingdom with operations in Peru. Pitkin’s asset is a 25% participating interest in Peru Block Z-38 located in offshore Tumbes Basin, Peru.

Karoon said along with its new farm-in partner Tullow Oil Peru Ltd., they were moving forward to drill Marina-1 exploration well during early 2020. The block was under force majeure since September 2013.

“The well will test the Marina Prospect which has a best case gross prospective contingent resource of 256 mmbbls (million barrels) at 100% interest (102 mmbbls net to Karoon),” it said.

“This will be the first well drilled in Block Z-38. The block sits in the heart of the Tumbes Basin, adjacent to the prolific oil producing Talara Basin which has produced 1.7 billion bbls to date. The Tumbes Basin has a proven working petroleum system and evidence suggests the prospects in Block Z-38 are accessing the same source rocks as the giant onshore Talara Basin fields,” Karoon said.

It said the block has a best case gross unrisked prospective resource of 1,373 mmbbls at 100% in 20 leads and prospects.

It described its partner Tullow as having “a long established” track record for exploration and that both companies recognize the high impact of the Marina-1 exploration well in opening up offshore exploration in the Tumbes Basin.

MANILA, Philippines — The government believes that the possible joint oil exploration between the Philippines and China in the West Philippines Sea will help address surging oil prices and ensure the country’s energy security.

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