Forum Energy to extend Recto Bank plan

The Department of Energy (DOE) will allow Forum Energy to extend its work program in the disputed Recto Bank, noting that the company needs more time to drill the area due to geopolitical tensions with China.

Forum Energy is majority owned by Philex Mining. It won Service Contract 72, which is in Recto Bank.

“We will grant it,” Energy Secretary Carlos Jericho Petilla said. “We don’t have any reason not to grant it. They will not request if they are not confident that they will be able to drill,” he said.

He said the DOE will likely grant Forum a two-year extension, which means company may be able to drill until 2016.

“It all depends if they are contracting the drilling ship already because it usually takes eight to months to mobilize that,” Petilla said.

The company has not been able to drill in the oil and gas-rich Recto Bank in offshore Palawan because of the country’s geopolitical tensions with China.

Philex Mining, a company chaired by Manuel V. Pangilinan, owns 64.45 percent of Forum Energy through its interests in FEC Resources Inc. and Philex Petroleum Corp.

This would be the second extension given to Forum Energy after the DOE extended to 2015 the original 2013 deadline.

The company sought an extension of the government-mandated work program because of delays in their drilling activities, dragged largely by the geopolitical issues between the Philippines and China.

Pangilinan earlier said the earliest they can drill is from March to May 2016.

In August 2012, the DOE issued a moratorium on all exploration and drilling works in the area due to the ongoing territorial dispute with China.

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.