UK-BASED gas and oil company Forum Energy Plc. temporarily put on hold the second sub-phase of Service Contract 72 (SC72) located at the disputed Recto Bank in West Philippine Sea.
The move came after the Department of Energy (DOE) granted a force majeure on the project because it falls within the territorial disputed area of the West Philippine Sea.
Energy Secretary Carlos Jericho Petilla earlier said that the Department of Foreign Affairs (DFA) has recommended that exploration activities in Recto Bank should be shelved until summer of this year to give way for possible talks between the two countries.
The area is now the subject of a United Nations arbitration process between the Republic of Philippines and the People’s Republic of China.
Under the terms of the force majeure, all exploration work at SC72 is immediately suspended effective December 15, 2014 until the DOE notifies the company that it may commence drilling.
“As a result, the second sub-phase of SC72 has been put on hold until further notice,” Philex Petroleum Corp. said in a disclosure to the Philippine Stock Exchange (PSE) on Tuesday.
Philex Petroleum holds a 60.49-percent interest in Forum Energy, which in turn has a 70-percent stake in SC 72.
Because of this development, the terms of the second sub-phase and all subsequent sub-phases will be extended by the terms of the force majeure.
Forum Energy originally planned to conduct this year a survey within SC72 to lay the groundwork for drilling activity in a disputed part of the West Philippine Sea.
Philex Petroleum chairman Manuel Pangilinan earlier said they would still pursue the contract believing that the disputed area belongs to the Philippines.
Due to delays in the exploration activities, Pangilinan said they would just apply for a contract extension when their contract expires in March next year.
RITCHIE A. HORARIO