DOE, DND weigh Forum Energy’s options in Recto Bank

ISTANBUL, Turkey – The Department of Energy (DOE) is coordinating with the Department of National Defense to evaluate Forum Energy’s options in  drilling at the disputed Recto Bank.

On the sidelines of the DOE’s international roadshow here for the Philippine Energy Contracting Round (PECR) 5, Rino Abad, director of the DOE’s Energy Resource Development Bureau, said his group would be coordinating with the Armed Forces of the Philippines’ (AFP) Western Command Group in Palawan to assess the situation.

“We will be talking to the WestCom in Palawan to see if the consortium can proceed with the drilling,” he said.

“We want to know first hand if drilling can proceed,” he added.

He said once the Western Command Group gives the go-signal, the DOE would inform the consortium that it could proceed with the drilling.

“We hope to materialize that coordination this month,” Abad said.

Forum energy wants to start drilling one well as its work program has already been delayed, Abad said.

Last July, the energy department granted Forum Energy’s request for an extension of its work program in the disputed Recto Bank as it needs more time to drill the area due to geopolitical tensions with China.

Forum Energy is a company majority owned by the group of Manuel V. Pangilinan. It won Service Contract 72, which is in Recto Bank.

Abad said the DOE has granted a two-year extension of the work program.

With the extension, the company may be able to drill by 2016.

The company has not been able to drill in the oil and gas-rich Recto Bank in offshore Palawan because of geopolitical tensions with China.

Philex Mining, a company also chaired by Pangilinan, owns 64.45 percent of Forum Energy through its interests in FEC Resources Inc. and Philex Petroleum Corp.

This would be the second extension to Forum Energy after the DOE extended to 2015 the original 2013 deadline.

The company sought an extension of the government-mandated work program because of delays in their drilling activities, dragged largely by the geopolitical issues between the Philippines and China.

Pangilinan earlier said the earliest they can drill is from March to May of 2016.

In August 2012, the DOE issued a moratorium on all exploration and drilling works in the area due to ongoing territorial dispute with China.

The Recto Bank area is estimated to contain prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.

Monte Oro Resources and Energy Inc. holds the remaining 30 percent stake in the service contract.