The Department of Energy (DOE) has granted a force majeure to the work commitments under Service Contract (SC) 75 and SC 72 in the West Philippine Sea (WPS).
In a report by the Philippine Star, the DOE granted the declaration, as signed by Energy secretary Raphael Lotilla, from April 6 until lifted by the department.
A force majeure excuses contractors from performing their obligations and entitles them to an extension of the exploration period under the service contract, corresponding to the days contractors spent in preparation for the activities that were suspended in April.
DOE stressed that the decision considered the concerns raised by PXP Energy and Forum, which holds SC 75 and 72, following the suspension of their exploration activities in the West Philippine Sea.
The Energy Department added expenses incurred amounting to $5.18 million for SC 75, and $8.60 million for SC 72 would be part of the approved recoverable costs, subject to the audit of the DOE.
PXP Energy holds a 50% interest in SC 75 in Northwest Palawan. Forum Energy Ltd., where PXP holds a 79.13% interest, has a 70% participating interest in SC 72 in Northwest Palawan, through its subsidiary Forum.
The previous force majeure imposed on SC 75 and SC 72 was lifted by the DOE on Oct. 16, 2020. However, the Security, Justice, and Peace Coordinating Cluster (SJPCC) ordered the suspension of the respective exploration activities in April.