MVP’s PXP cedes Linapacan deal

PXP Energy Corp., the upstream oil and gas company of businessman Manuel V. Pangilinan, has dropped the exploration and development of the Linapacan block in offshore northwest Palawan under Service Contract (SC) 74 with the government. 

The listed company informed the local bourse on Friday that the notice of surrender of SC 74 it submitted, along with consortium partners Philodrill Corp. and Philippine National Oil Company-Exploration Corp., was approved by the Department of Energy (DoE). 

“This will not have a material impact on PXP’s 2024 financial statements,” the company assured stakeholders. PXP Energy has a 70 percent operating interest in SC 74.

PXP Energy and its consortium partners notified the DoE of their decision to surrender their service contract after they found that there were “no drillable prospects” within the designated contract area.

The Energy Department approved the relinquishment of SC 74 with the condition that the remaining scholarship commitment of $55,000 be settled. 

The obligation was part of the contractor’s participation in the government’s Energy Iskolar ng Bayan Program, which involves providing scholarships to deserving students.

The SC 74 (Linapacan block), located in the shallow waters off the northwest coast of Palawan, covers an area of 4,268 square kilometers.

Philippine Energy Contracting Round 4 awarded the contract to Pitkin and its consortium partner, Philodrill, in September 2013. 

70% interest

Pitkin held a 70 percent operating interest, while Philodrill held a 30 percent participating interest.

In June 2015, Philodrill and PNOC-EC entered into a Deed of Agreement, resulting in Philodrill transferring a 5 percent participating interest to PNOC-EC.

Pitkin transferred its share and operatorship of SC 74 to PXP Energy, then known as Philex Petroleum Corp. in February 2016 as approved by the DoE. 

In the first quarter of the year, PXP Energy logged a net loss of P2.61 million, narrower than the P6.08 million net loss incurred during the same period in the previous year.

Beyond SC 74, PXP Energy maintains a 100 percent operating interest in the North Recto Bank, as well as a 50 percent operating interest in SC 75. It also holds a 40 percent non-operating interest in the Sulu Sea Basin.

Likewise, PXP Energy has a 79.13 percent controlling interest in Forum Energy Ltd., which in turn holds a 70 percent operating interest in SC 72 (Recto Bank).