Oil shares leap on Duterte lifting of WPS oil exploration ban

Oil and mining shares listed on the Philippine Stock Exchange saw an increase in their prices on the heels of the government’s announcement that the temporary suspension of petroleum exploration and drilling activities in the West Philippines is now lifted.

The Mining and Oil index increased by 720.57 points or 10.79% to close at 7,398.21.

“The lifting of the oil exploration moratorium in the West Philippine Sea  to ensure the supply of energy resources boosted the oil and mining sector, particularly those listed companies that have a stake in Service Contract 72 (Recto bank),” Christopher San Pedro, Unicapital Securities equity analyst, said.

In particular, shares of Pangilinan-led PXP Energy Corp., which holds the Service Contract 75 located in northwest Palawan, surged 49.90% to close at P7.72 apiece from P5.15 on Thursday.

Atok Big-Wedge, which has stakes in London-listed Forum Energy — which holds 70% economic interest in SC 72 (Reed Bank) — jumped 49.87% to P11.54 per share from P7.70 apiece.

Apex Mining, meanwhile, saw a 34.84% increase to P2.09 per share from P1.55 apiece. Apex Mining’s unit Monte Oro Resources & Energy also has interests in SC 72.

On Thursday night, the Department of Energy (DOE) announced that President Rodrigo Duterte gave the thumbs up for its recommendation to lift the suspension of petroleum activities in the disputed waters.

With this, the Energy department has already issued a “Resume-to-Work” to the Service Contractors (SC) doing petroleum-related activities in the areas of SC 59, 72, and 75 in the West Philippine Sea.

The activities there were suspended on the ground of “Force Majeure” due to the WPS dispute.

The SC 59 in West Balabac, southwest of Palawan is operated by state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC).

The SC 72 in the Reed Bank, meanwhile, is held by London-listed Forum Energy Ltd.

Pangilinan-led PXP Energy Corp. holds the SC 75 in northwest Palawan.

The bellwether PSEi, meanwhile, shed 39.86 points or 0.67% to 5,898.47 at the closing bell. The broader All Shares lost 3.71 points or 0.10% to 3,581.91.

“The ongoing stimulus deal uncertainty in the US and Friday profit taking strategy pushed the index to close at 5,898.47 down by 39.86 points,” San Pedro said.

More than 4.888 billion shares valued at P5.636 billion, changed hands. Advancers led decliners, 118 to 89, and 46 issues were unchanged. -NB, GMA News