Recto Bank drilling on hold but MVP not giving up

MANILA, Philippines - It looks like drilling activities in Recto Bank, a petroleum exploration area located in the disputed West Philippine Sea , will remain in a  standstill due to the continued geopolitical tension between the Philippines and China. 

But businessman Manuel V. Pangilinan said he would continue to pursue the contract to explore the area.

Energy Secretary Carlos Jericho Petilla said the Department of Foreign Affairs (DFA) has advised the energy department to hold off drilling activities in the area. 

“We’ve been advised to hold off any exploration activity until the summer of this year. We don’t want the project to be the culprit of reason (for any additional tension),” Petilla said. 

London-listed Forum Energy plc., a unit of Philex Petroleum Corp., holds the license for Service Contract 72, which covers Recto Bank.  It earlier received the green light from the Department of Energy to conduct a drilling survey in the petroleum exploration area.

Phoenix Petroleum holds a 60.45 percent stake in Forum, which has a 70 percent operating interest in SC 72 located in the West Philippine Sea.

Pangilinan, chairman of Phoenix Petroleum, can’t help but heave a sigh of frustration. 

“I don’t think China will give up its claim. It’s a simple as that,” he said. 

At the same time, he said he also would not give up on the contract. 

“Of course not. I believe it’s ours,” he stressed.

In August 2012, the DOE issued a moratorium on all exploration and drilling works in the area due to ongoing territorial dispute with China, prompting the company to seek an extension of the work program.

The DOE earlier extended Forum’s exploration license by another year, or from August 2015 to August 2016, due to delays in the work program.

The company earlier sought a first extension of its work program in January 2013.

Forum also went into talks with China National Offshore Oil Co. (CNOOC), China’s state-owned oil producer, for a possible commercial arrangement covering Recto Bank but discussions have stalled.

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.