FRONTIER Oil Corp. (FOC) has taken control of the exploration block in the Visayan Basin covered by Service Contract (SC) 69, FOC Chief Executive Kris Fellowes said on Monday.
FOC has raised its equity holding in SC 69 from 15 percent to 50 percent and is now the operator of the exploration block in the offshore section of the contract site.
Fellowes said this move will further strengthen FOC’s position in the country’s upstream oil sector.
“With FOC increasing its stake in SC 69 and taking on operatorship, the company now has a firm foothold in each of the three most prospective basins in the Philippines in terms of exploration — Palawan, the Cagayan and the Visayan Basins, the latter being opportunistic given the relinquishment of the acreage by the former operator,” said Fellowes.
SC 69 was formerly operated by Australian firm Otto Energy in partnership with FOC and Trans-Asia Oil and Energy Development Corp.
Otto Energy, however, relinquished its stake in the petroleum block in 2013.
Fellowes said Otto Energy has also announced an extension in their SC 55, a block formerly operated by BHP that houses enormous structures.
Despite the local industry reeling from the recent oil price slump, FOC remains optimistic and sees it as a potential opportunity.
“With respect to our offshore development and the Calauit oilfield, the economics have obviously been affected but our intention is to adjust our development plan a little to counteract this,” he explained.
While it is financially challenging to operate under these conditions, Fellowes noted the market is now revising its expectations and as a consequence, a lot of the larger industry participants are taking advantage of the opportunity and acquiring the smaller players.
“Frontier accepts the reality of the situation and is looking to capitalize on this development,” said Fellowes.