PXP ENERGY CORP. and its partners have secured approval to continue production at the Galoc Oil Field off northwest Palawan after getting a fresh petroleum service contract from the Philippine government.
In a regulatory filing on Tuesday, the upstream oil and gas company said the field’s operator, NPG Pty. Ltd., has received a copy of petroleum service contract 88, which was executed on Dec. 18.
The contract replaces service contract 14C-1, which expired on Dec. 17 and covered the exploration, development and production of petroleum resources at the Galoc field.
PXP said the Galoc field has produced more than 25 million barrels of oil since operations began in October 2008 and remains commercially viable despite natural production decline, allowing operations to extend beyond the previous contract’s term.
To enable continued production, the Galoc consortium — composed of NPG, Philodrill Corp. and Forum Energy Philippines Corp. — filed an application last year for a development and production petroleum service contract.
PXP holds an indirect 3.21% interest in the Galoc field through its unit Forum Energy Philippines Corp.
While the company acknowledged that Galoc is a mature and depleting asset, it said the replacement contract “provides a framework to extend operations and maximize value from remaining resources, subject to technical and commercial considerations.”
Service contract 88 adds to PXP’s portfolio of recently awarded petroleum contracts.
Last year, the company and its joint venture partners secured service contracts for the Sulu Sea blocks service contracts 80 and 81, as well as service contract 86 covering the Octon Block in northwest Palawan.
PXP said these contracts strengthen its position in oil and gas exploration and support the Philippine government’s objective of increasing domestic energy production.
For the third quarter, PXP posted a wider attributable net loss of P15.17 million, compared with P7.54 million a year earlier, as operating revenues declined.
PXP shares rose 0.81% to close at P2.50 apiece on the Philippine Stock Exchange. — Sheldeen Joy Talavera