MANILA, Philippines (UPDATED) - The Department of Energy (DOE) has approved the request of Forum Energy, a company led by businessman Manuel V. Pangilinan, to extend the drilling and investment schedule in Reed Bank (also Recto Bank) by two more years.
In a disclosure to the stock exchange, Philex Petroleum, also controlled by Pangilinan and majority owns Forum Energy, said it received the DOE nod Monday, January 28.
"The deadline of completion of the second sub-phase, comprising the drilling of two appraisal wells, has now been extended by two years to August 14, 2015," the statement said.
On January 24, Pangilinan aired his frustration over the delays in the DOE approval of Forum's request since one of the deadlines in their government-mandated work program -- August 13, 2013 -- is fast approaching.
Pangilinan said they will need the "the weather window" from March to April to do the driling and meet the deadline.
"It takes awhile to mobilize…We need a survey first on site to determine the sea basin for stability for an oil rig. We haven’t done that yet,” he had said.
Forum Energy's work program approved and mandated by the government calls for the drilling of two exploratory wells.
In October 2012, Forum Energy was scheduled to conduct geotechnical investigation of the Reed Bank site. This did not push through largely due to the ongoing dispute between Philippines and China over Scarborough shoal north of the Reed Bank.
Delays in the drilling activities -- and the required investment of at least US$5 million for each phase -- were due to geopolitical issues between the Philippines and China.
Sovereignty issues first
Forum's service contract (SC-72) from the government covers an 8,800-square-kilometer area in offshore west Palawan. Forum Energy's consultant Weatherford Petroleum has previously revealed that the area contains prospective resources of as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
Reed Bank is located in the South China Sea (West Philippine Sea) and is part of the disputed area that has become the subject of a case the Philippines has filed before the United Nations Arbitral Tribunal.
In a January 26 interview, President Benigno Aquino III, who approved the filing of the arbitration case, said it is his responsibility to defend the country's sovereignty.
“With all due respect to Mr. Pangilinan, what am I supposed to do?” Aquino said. “I think, we are protecting not only his (Pangilinan’s) rights, but we are protecting all the rights of all Filipinos, to exploitation of the resources within our exclusive -- I have to emphasize -- exclusive economic zone based on the United Nations Convention on the Law of the Sea.”
The Philippine government awarded SC-72 in 2010 to the private consortium as part of efforts to assert sovereign rights over parts of the South China Sea (also West Philippine Sea). China, however, is claiming all of it.
Pangilinan has previously discussed a possible commercial deal with Chinese state oil company CNOOC, but those efforts have yet to bear fruit amid geopolitical friction between the two countries.
Pangilinan-led Philex Mining owns 64.79% of Philex Petroleum which, in turn, holds a direct and indirect stake in Forum Energy of 60.49%. Forum Energy is an oil and exploration firm based in U.K. - Rappler.com