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Forum Pacific eyes new deals to boost profits

By Neil Jerome C. Morales (The Philippine Star) | Updated July 18, 2012 - 12:00am

MANILA, Philippines - Listed upstream oil firm Forum Pacific Inc. is banking on new petroleum and gas service contracts to increase its profitability.

The company is also looking to explore areas adjacent to the Libertad field in northern Cebu that is producing marginally, a company official said.

“We have submitted three applications. Hopefully we can get one,” Forum Pacific president Peter Salud said in an interview.

“We are talking about promising areas. If we get one, our resources and time will be devoted to this particular area,” he said.

In May, the Department of Energy (DOE) received 16 bids for 12 areas under the Philippine Energy Contracting Round (PECR) 4. Last year, the DOE launched PECR 4, offering 15 new gas exploration areas nationwide that will require around $7.5 billion in investments.

The bids of Forum Pacific for the 640,000-hectare Area 10 in East Palawan; 600,000-hectare Area 11 Cotabato and 482,000-hectare Area 15 in Sulu Sea were accepted by the DOE.

The DOE, for its part, is evaluating the offers according to the proposed work program of the bidders.

“We are a listed company so we have the resources to back our intention,” Salud said.

Meanwhile, Salud said Forum Pacific is not keen on joining the bidding for Areas 3, 4 and 5 in Northwest Palawan that is adjacent to the resource-rich and disputed Spratlys Islands late this month.

“We are talking about the big boys here,” Salud said.

To date, the company’s revenues came from its 33.33-percent stake in the Libertad gas field or Service Contract (SC) 40. Project operator Forum Exploration Inc. is a subsidiary of Pangilinan-led Forum Energy Plc.

Salud said the company generated $50,000 in revenues since starting commercial production in February.

Gas output is sold to Desco Inc., which installed a one megawatt (MW) natural gas-fired power plant that is connected to Desco’s buyer Cebu Electric Cooperative II.

“This is not sizeable but there are plans to explore further the vicinity... we might be able to raise it to two or three MW,” Salud said.

The service contract, which covers the northern half of the Cebu island and the offshore areas of Central Tañon Strait and Visayan Sea, was awarded to the company in 1995.

Salud said more exploration, with the help of its partner Forum Energy, might start next year.

“Now, it is our first time [to produce gas] so we are studying very carefully the flow of gas,” Salud said.