Author Topic: Service Contract No. 57 – Calamian  (Read 554 times)

adroth

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Service Contract No. 57 – Calamian
« on: August 12, 2017, 05:17:06 AM »
Administrator's note: This thread has a companion on the forum's FB extension here: https://www.facebook.com/groups/rpdefense/permalink/1404328862986290/

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From: http://pnoc-ec.com.ph/service-contract-no-57-calamian/

Service Contract No. 57 – Calamian

Project Location : Offshore Northwest Palawan

Nature of Project : Petroleum Exploration

JV Partners and Percent Equity :  China National Offshore Oil Company International Limited (CNOOC) – Operator  51%, PNOC EC 28%, Mitra Energy Limited (MITRA) 21%.

Project Description: SC 57 was awarded to PNOC EC on 15 September 2005. It covers a total area of 7,120 sq. km. in offshore Northwest Palawan and is situated around fifty (50) kms. northwest (NW) from the north-westernmost tip of Busuanga Island.

CNOOC farmed-in into SC 57 on 3 April 2006 acquiring 51% participating interest and operatorship while Mitra Energy farmed-in on 3 March 2006 getting 21%.  The Deed of Assignment to formalize their entry has yet to be signed by the President of the Philippines.

Brief Background : SC 57 is within the prolific NW Palawan block and is host to the Bantac I well, a non-commercial oil discovery by Occidental Petroleum.  With the farm-in of CNOOC and Mitra, additional 2,200 km. of 2D seismic data was acquired on top of the 3,300+ km. acquired by the previous contractors.

However, the request for approval of the Deed of Assignment to CNOOC and Mitra Energy has been pending since 2006 with the Office of the President (OP). SC 57 is currently under force majeure but exploration activities will resume once approval is granted.
« Last Edit: August 12, 2017, 09:40:18 PM by adroth »

adroth

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Re: Service Contract No. 57 – Calamian
« Reply #1 on: August 12, 2017, 06:28:57 AM »
JV Partners and Percent Equity :  China National Offshore Oil Company International Limited (CNOOC) – Operator  51%, PNOC EC 28%, Mitra Energy Limited (MITRA) 21%.

Project Description: SC 57 was awarded to PNOC EC on 15 September 2005. It covers a total area of 7,120 sq. km. in offshore Northwest Palawan and is situated around fifty (50) kms. northwest (NW) from the north-westernmost tip of Busuanga Island.

CNOOC farmed-in into SC 57 on 3 April 2006 acquiring 51% participating interest and operatorship while Mitra Energy farmed-in on 3 March 2006 getting 21%.  The Deed of Assignment to formalize their entry has yet to be signed by the President of the Philippines.

< Edited >

However, the request for approval of the Deed of Assignment to CNOOC and Mitra Energy has been pending since 2006 with the Office of the President (OP). SC 57 is currently under force majeure but exploration activities will resume once approval is granted.

By being party to the Service Contract, doesn't it mean that China is bound by the terms of that contract, which includes recognition of Philippine laws?

Doesn't this mean that this sets a precedent for China's policies within the WPS . . . at least from a legal standpoint?

https://www.doe.gov.ph/model-petroleum-service-contract-0

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< Edited >

W I T N E S S E T H; That:

WHEREAS, all Petroleum, Crude Oil, Crude, Natural Gas and/or Casinghead Petroleum Spirit of the Philippines belong to the State and their disposition, exploration, development, exploitation and utilization  is under the full control and supervision of the DEPARTMENT under  Presidential Decree No. 87, as amended, otherwise known as the Oil Exploration and Development Act of 1972 (the “Act"), Republic Act 7638 otherwise known as the Department of Energy Act of 1992, and Section 2, Article XII of the 1987 Constitution;

WHEREAS, the Act declares it to be the policy of the State to hasten the discovery and production of indigenous Petroleum through the utilization of Government and/or private resources;

WHEREAS, the CONTRACTOR desires and agrees to provide funds, and apply its appropriate and advanced technology and expertise to cooperate with the DEPARTMENT for the exploration, development and exploitation of Petroleum resources within the Contract Area and agrees to be subject to the laws and decrees of the Government and other rules and regulations of the DEPARTMENT in the implementation of the Contract;

NOW, THEREFORE, in view of the foregoing premises, the DEPARTMENT and CONTRACTOR hereby stipulate and agree, as follows:

< Edited >

adroth

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Re: Service Contract No. 57 – Calamian
« Reply #2 on: August 12, 2017, 09:46:23 AM »
From 2011

DoE revisits China farm-in to SC 57
By: Abigail L. Ho - @inquirerdotnet
Philippine Daily Inquirer / 11:11 PM August 03, 2011

The Department of Energy (DoE) is working on accelerating the approval of the farm-in agreement that China National Offshore Oil Co. (CNOOC) signed with the Philippine National Oil Co. Exploration Corp. (PNOC-EC) for Service Contract 57, as this has been pending approval since its signing more than five years ago.

In an interview with reporters, Energy Undersecretary Jose Layug Jr. said the agreement was being reviewed.

In three weeks, all issues hampering the approval should already be resolved, enabling the DoE to submit its endorsement of the deal to Malacañang.

“It was pending before the previous administration in Malacañang, so they followed it up. We’re reviewing the documents and checking whether we can approve the application. The issues pertain more to administrative issues because there was a previous executive order that required certain processes. We need to clarify that,” Layug said.

“In terms of CNOOC’s financial, legal and technical qualifications, we don’t see any problems with that. We just need to sort out the processes required for the farm-in, since CNOOC is one of the most well-respected state-owned exploration companies (in the world),” Layug added.

< Edited >

Read more: http://business.inquirer.net/10349/doe-revisits-china-farm-in-to-sc-57#ixzz4pYmYzGx8
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adroth

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Re: Service Contract No. 57 – Calamian
« Reply #3 on: August 12, 2017, 08:12:06 PM »
The President laid out his "red line" to Al Jezeera last year (see here): He will not compromise Philippine sovereignty. He EXPLICITY stated that he is not authorized to do so, and has publicly declared that any President the does is subject to impeachment.

Given that Duterte is a person who bends the law when he can, that admission of a limitation is significant. That means that any way forward that involves China -- assuming that that is the way we will go instead of dealing with either India or Russia -- will be within the confines of the Philippine constitution. Many posters on the FB extension appear to assume that any deal with China will be dictated by China, which flies in the fact of recent precedent that clearly shows that China is actually willing to defer to the Philippines on matters of sovereignty, as evidence by Service Contract 57.