MVP says CNOOC snubs PXP Energy offer to resume talks

PXP ENERGY Corp. has again reached out to China National Offshore Oil Corp. (CNOOC) for the resumption of talks about jointly exploring petroleum in the contested seas but was met, so far, with silence, the local company’s chairman said.

“We tried to reach out to them (several weeks ago), can we talk, because we have spoken with them in the past,” PXP Chairman Manuel V. Pangilinan (MVP) told reporters on Tuesday afternoon.

So far, the Chinese state company has not responded to PXP’s feelers.

“Silence on their (CNOOC) part. I’m just assuming that they have not gotten permission from their government to talk to us… I’m just guessing. I don’t know them that well. I don’t know how the Chinese government works or how CNOOC works and it’s none of my business. So I’m just guessing,” Mr. Pangilinan added.

PXP’s latest move to initiate talks with CNOOC comes as it is keen to restart its work program on Service Contract (SC) 72 on Recto Bank.

PXP previously said Forum (GSEC 101) Ltd. had sent a letter of request on Dec. 21, 2018 to the Department of Energy (DoE) to lift the force majeure imposed on the service contract.

Forum Energy Ltd., in which PXP holds a direct and indirect interest of 78.98%, has a 70% participating interest in SC 72 located in Northwest Palawan, through its wholly owned subsidiary Forum GSEC. PXP has a total economic interest of 53.1% in SC 72.

The DoE placed SC 72 under force majeure on March 2, 2015 because the contract area falls within the area that was at that time the subject of an arbitration process between the Philippines and China.

The Permanent Court of Arbitration in The Hague in the Netherlands ruled on July 12, 2016 that Recto Bank lies within the Philippines’ exclusive economic zone as defined under United Nations Convention on the Law of the Sea. China refused to recognize the ruling.

“I understand the DoE has written the DFA (Department of Foreign Affairs) because clearly it involves the relationship with China, and I think that’s where it is,” Mr. Pangilinan said.

“So we have not been officially advised what is the next step for us. All we know is we’ve written the DoE ‘can you please lift the moratorium so we could, our work program, we’re ready to [execute] the work program, please allow us.’ And I think quite rightly DoE consults DFA what the DFA response is to the DoE we don’t know yet so we’re waiting,” he added.

Ties between the Philippines and China have improved under the present administration. Talks of a joint exploration have been revived, with the DoE saying in December last year that it had notified the DFA to initiate discussions on how to proceed with activity in the disputed areas in the West Philippine Sea, or South China Sea.