Forum Gets More Time to Drill on Disputed License Offshore Philippines

Forum Energy disclosed late Friday in a statement that it has secured a two-year extension from the Philippine Department of Energy (DOE) to drill two appraisal wells in an offshore petroleum license, Service Contract 72 (SC72), located in territory claimed by China in the South China Sea.

SC72, sited west of the Palawan Island in the South China Sea, spans 3,398 square miles (8,800 square kilometers). Forum revealed in its 2011 earnings report that results from a 96 square kilometer (248 square mile) 3D seismic survey of the license indicated a mean volume of 3.4 trillion cubic feet of gas-in-place with significant upside.

The company has been planning to start on its second sub-phase work program, which involves the drilling of two appraisal wells, but it has been unable to send rigs to the license area due to interference from Chinese naval ships.

"The DOE can extend the license of SC72 should the project proponents find it difficult to implement their program … amid the territorial dispute involving China and Taiwan," the DOE said in a statement in May of last year.

Under the extended contract, Forum will need to complete drilling two appraisal wells by Aug.14, 2015. The original contract states that Forum was to complete drilling the wells by mid-2013.

The Philippines has moved to challenge China's claim to most of the South China Sea/West Philippine Sea at a United Nations tribunal. On Jan. 22, Manila told Beijing's ambassador about its decision to take China to arbitration under the 1982 United Nations Convention on the Law of the Sea.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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