Page 9 - AsiaElec Week 43 2020

AsiaElec COMMENTARY AsiaElec

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

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