PNoy: Nothing wrong with MVP plan to work with Chinese on Recto Bank

(Updated 11:15 p.m.) President Benigno Aquino III said Monday that he sees nothing wrong with businessman Manuel V. Pangilinan’s plan to work with a Chinese oil company and other foreign investors on a joint oil exploration project at the Recto Bank as long as it complies with Philippine laws.

 

However, Aquino clarified that Pangilinan has a service contract from the Philippines and not a joint service contract. The business tycoon, therefore, “will be undertaking the venture based on authorization coming from the Philippine government.”

 

He said all the guidelines and conditions for the project are stated in the license and service contract issued to Pangilinan.

 

“He has been apprised of the same. He knows the conditions emanating thereto. And this is a major project. ’Yung there will be a lot of finances that are needed and it is incumbent upon him to source this financing also,” said Aquino, who was in Benguet province for new Liberal Party members' mass oath-taking.

  

Both the Philippines and China are claiming the Recto Bank, which is said to be rich in oil and gas.

 

Pangilinan is the chairman of Philex Mining Corporation. Its subsidiary, Philex Petroleum, has a 65 percent controlling interest in Forum Energy, which in turn has a 70 percent stake in Service Contract 72 or the Recto Bank concession.

 

Last week, Pangilinan said the consortium will explore for gas at the Recto Bank with maybe one or two more foreign partners in addition to the partnership with the Chinese-government-owned China National Offshore Oil Corporation, or CNOOC, which Philex is currently preparing to work with.

 

Pangilinan traveled to Beijing recently for a meeting with Chinese officials and CNOOC executives.

 

21% more than Malampaya

 

In April 2012, Forum Energy revealed seismic data on the Recto Bank that indicated there were 4.6 trillion cubic feet of gas and 115 million barrels of oil and liquids at the Sampaguita gas field.

 

The amount of gas found is 24 percent higher than the findings confirmed in 2006 by independent consultant Count Geophysics Ltd.

 

Furthermore, even the conservative 2006 findings are 21 percent higher than the Malampaya gas reserves. The indigenous gas from Malampaya fuels three natural gas-fired power stations with a total generating capacity of 2,700 megawatts to provide 40 to 45 percent of Luzon's power generation requirements. 

 

Open to partnering

 

By May of this year, "The Philippine Star" reported that the Pangilinan-led Philex Petroleum was open to partnering with anyone that can help exploit the potential resources of Recto Bank with CNOOC seeming to be one of the companies that fit the bill.

 

“Typically a gas field will need a major expenditure and the help of international oil firms that have the technical capability and the financial resource to develop a field of some size,” Pangilinan reportedly said.

 

He added that it was important, if not critical for them, to partner with one or more than one international oil companies.

 

“We cannot do this on our own,” concluded Pangilinan. —DVM/VS, GMA News