Exploration activities near contested West PHL Sea canceled

The Department of Energy (DOE) has issued a notice of force majeure for Service Contract No. 75 (SC 75), effectively suspending all exploration activities in offshore Northwest Palawan.

 

The notice exempts oil and gas companies from fulfilling their contractual obligations due to external factors.

 

"PetroEnergy Resources Corporation confirms that the Philippine Department of Energy has granted a force majeure on Service Contract No. 75 as this service contract area falls adjacent to SC 58 and SC 72, both of which remain under force majeure," the company told the Philippine Stock Exchange on Friday.

 

SC 75 covers an area of 1.522 million acres (616,000 hectares) in the Northwest Palawan Basin or Area 4 under the 4th Philippine Energy Contracting Round for Petroleum (PECR4 Area 4).

 

In a separate filing, Philex Petroleum Corp. said that the DOE suspended SC 75 by force majeure noting that the area is next to SC 58 and SC 72. The adjacent areas were given separate notices of force majeure on the back of geopolitical tensions over West Philippine Sea.

 

In a text message, Philex Petroleum noted that its "president is currently in transit. However, the Petroleum Department said that they have no ready statement as of yet and has yet to set a meeting to discuss the matter tomorrow."

 

A force majeure clause is a provision in a contract that excuses a party from not performing contractual obligations that becomes impossible or impracticable, due to an event or effect that the parties could not have anticipated or controlled, according to USLegal Inc.

 

Philex Petroleum holds a 50 percent stake in SC 75, and  PetroEnergy holds 15 percent. The remaining 35 percent is owned by state-run PNOC Exploration Corp. – VS, GMA News