PXP Energy Corp. has decided to discontinue its gas exploration in Service Contract 74, which covers an area of 4,268 square kilometers in the shallow waters of northwest Palawan.
The company cited a lack of drillable prospects in the service contract as the reason for this decision, according to its disclosure to the Philippine Stock Exchange on July 19.
Reports indicate that the Department of Energy (DOE) has already agreed to allow PXP, which holds a 70% interest in the gas project, to relinquish its responsibilities in SC 74.
“The DOE has approved the surrender of SC 74 of which PXP has an operating interest of 70 percent. This will not have a material impact on PXP’s 2024 financial statements,” PXP said.
The remaining partners in the SC 74 consortium include Philodrill Corp., holding a 25 percent stake, and the state-owned PNOC Exploration Corp., which owns 5 percent.
According to the energy department, the initial obligations for the service contract involved geological and geophysical evaluations, including the acquisition of 3D seismic data and the refinement of selected 2D seismic data.
Approximately 1,600 km of 2D seismic data was collected in 2016 from the area via a multi-client seismic survey conducted by DOE and CGG, and was later analyzed along with gravity and magnetic data.
The analysis was completed in 2017 and has since been incorporated into the broader gravity-magnetic studies. Additionally, the Linapacan-A and Linapacan-B oil findings were assessed to determine their potential for commercial development.
