PXP Energy’s subsidiary eyes exploration headway in Peru petroleum block

While work program at its service contracts on the domestic front had been fledgling, the subsidiary of Pangilinan-led PXP Energy Corporation is gaining traction on its petroleum exploration venture in offshore Peru, primarily getting boosted with the entry of a new partner.

Its investment in that petroleum block is via subsidiary Pitkin Petroleum Ltd.’s corporate vehicle Pitkin Petroleum Peru, which cornered 25 percent participating interest in Peru Block Z-38 in that country. PXP Energy owns 53.43 percent in Pitkin Petroleum.

The operatorship of that upstream petroleum venture in Peru is currently under listed firm Karoon Gas Australia Ltd.

The Australian firm farmed out 35 percent interest in the Peru petroleum block to Tullow Peru Ltd., which is a wholly owned subsidiary of Tullow Oil Plc.

In their deal, acquiring firm Tullow has been prescribed to fund 43.75 percent of the cost of the first exploration well. That will be capped at US$27.5 million (at 100 percent), beyond which Tullow will pay its 35 percent share.

It was further provided that Tullow will be paying US$2.0 million “upon completion with a further $7.0 million payable upon declaration of commercial discovery and submission of a development plan to Perupetro.”

“The agreement remains subject to the satisfaction of certain licensing conditions and regulatory approvals,” a media statement from Karoon Gas has noted.

It added that “following the completion of the farm-out well, Tullow will have an option to assume operatorship of the block.”

In the Philippines, the ventures of PXP Energy have been hurdled chiefly by concerns straddling diplomatic row over the West Philippine Sea.

One of its major prospects – in the Recto Bank, had been stopped on its drilling program because of a moratorium on exploration that the Department of Foreign Affairs (DFA) had enforced on the so-called “territories of conflict.” (MMV)