Page 12 - GLNG Week 42

GLNG COMMENTARY GLNG

The government has
approved First Gen’s
plans to begin work
on an FSRU-based
LNG import project in
Batangas Province.

With the government having given the green on SC 59, he said that while SC 57 held more
light to resume work, PXP has wasted little time promise that was only because the company did
in trying to rebuild momentum, announcing not have much data but that it was upbeat over
on October 19 that it was in ongoing negotia- SC 59’s promise.
tions with CNOOC over the development. PXP
said Forum was handling the talks, though both What next?
sides have yet to reach a disclosable definitive The Philippines has forecast that Malampaya will
agreement. run dry by 2027, though the field may see its life
US oilfield services provider Weatherford has extended through additional drilling work. After
previously estimated that SC 72 contain 2.6-8.8 all, the field was until a few years ago originally
trillion cubic feet (62.3-249.22bn cubic metres) predicted to reach its end of life in 2023. Never-
of gas. theless, the broad consensus is that the field has a
PXP, meanwhile, operates SC 75 with a 50% limited lifespan and the power plants it feeds will
interest and has previously said it intends to need a replacement source of feedstock.
acquire 3D seismic data over selected leads To this end, the government in September
once the ban had been lifted. The company approved First Gen’s plans to begin work on a
completed its Sub-Phase 1 work commitment floating storage and regasification unit (FSRU)
in December 2015, at which point force majeure based LNG import project in Batangas Prov-
was declared. ince. Deliveries are due to begin in 2022. The
PNOC, which operates SCs 57 and 59, project will give the government’s energy plan-
announced its own exploration plans on Octo- ners room to breathe as they strive to stimulate
ber 20. upstream investment.
PNOC-Exploration Corp. (PNOC-EC) presi- While Duterte’s move to lift his moratorium
dent Rozzano Briguez told a senate budget hear- is a welcome one, paving the way for developers
ing that initial studies suggested SC 57 could to tap into the country’s offshore potential, his
hold up to 1.8 tcf (50.98 bcm) of gas. The acre- timing is another matter altogether. The project
age contains the Calamian oil and gas prospect Convincing foreign investors to commit to
and is located near close to Malampaya, which is new upstream projects will be an uphill battle, will give the
estimated to hold 2.9-3.2 tcf (82.13-90.62 bcm). given current economic conditions, and PNOC government’s
CNOOC bought a 51% stake in Calamian in may struggle even to convince its existing
2006 and Mitra Energy, now Jadestone Energy, partners to part with their cash. CNOOC has energy planners
acquired a 21% interest in 2006. already made it clear that its investment strategy
Duterte signed Executive Order 80 in 2019 will favour domestic projects over foreign fields, room to breathe
ending the company’s obligation to hold bid while Jadestone’s focus has been on extending
rounds for exploration ventures and Briguez its core Australia area into New Zealand with as they strive
said PNOC-EC now aimed to bring on other the acquisition of the Maari project from OMV. to stimulate
investors and reduce its 28% stake even further. If Chinese investors prove reluctant to com-
“We will be farming out for SC 57. We own mit to the projects, and are not motivated by upstream
28% but with the new [executive order] EO, we political considerations such as Beijing being
will be farming out 70%. The terms of reference able to promote a softer image in disputed investment.
are currently being validated by the DOE and waters, bringing new Philippine fields online
then once it is approved, we will farm it out and might prove too much of a challenge. The gov-
proceed and with the additional studies and the ernment would need to convince potential
drilling for SC 57,” the executive said. investors that the promise of offshore rewards
“If we start drilling by 2021, hopefully in outweighed the risks posed by volatile South
five years, we will go into production and that China Sea relations, a somewhat tall order when
is 2026 or early 2027,” he added. Commenting all is said and done.™

P12 www. NEWSBASE .com Week 42 23•October•2020