PXP Energy Courts International Backers for Philippine Oil and Gas Projects

KEY TAKEAWAYS

·PXP Energy is seeking foreign investment to develop service contracts in the Philippines, including the first petroleum deals in the Bangsamoro region covering over 1.3 million hectares in the Sulu Sea.
·The company's core West Philippine Sea assets, Service Contracts 72 and 75, remain under force majeure due to territorial disputes, prompting a strategic pivot to uncontested blocks.
·Chairman Manuel Pangilinan confirmed interest in native hydrogen exploration, following government integration of the resource into the existing petroleum service contract system.

Capital Hunt for New Blocks

PXP Energy Corp. has launched an active search for international capital to finance upstream petroleum projects across the Philippines, focusing on service contracts outside the territorial dispute zones that have paralyzed its core West Philippine Sea holdings.

Manuel V. Pangilinan, chairman of PXP, confirmed the company is engaging potential foreign partners to raise funds for multiple service contracts. The firm has approached Chinese companies among others, targeting areas firmly within Philippine jurisdiction and free from geopolitical complications. PXP's two anchor assets, Service Contract 72 covering Recto Bank and SC 75 in Northwest Palawan, remain under force majeure due to ongoing tensions in contested waters.

Despite the freeze on those flagship blocks, Pangilinan maintains confidence in their long-term value while the company pivots to alternative opportunities awarded by Manila.

Bangsamoro Breakthrough

PXP secured three new petroleum service contracts in 2025, marking a strategic shift toward underexplored domestic basins. Service Contracts 80 and 81 represent the first petroleum deals ever granted within the Bangsamoro Autonomous Region in Muslim Mindanao, opening up vast acreage in the Sulu Sea.

SC 80 spans 780,000 hectares and includes the Dabakan and Palendag gas discoveries, legacy prospects previously explored by ExxonMobil. SC 81 covers 532,083 hectares across multiple wells that early data suggest hold oil and gas potential. Both blocks sit in the Sulu Sea, a basin that has seen minimal drilling activity compared to older Philippine petroleum provinces.

The company, through joint venture partnerships, also won SC 86, which encompasses roughly 132,000 hectares in the Malajon area off northwest Palawan. All three contracts will require years of exploration drilling and appraisal work before any commercial production can begin, according to Pangilinan.

Indigenous Energy Ambitions

The push for foreign investment ties directly to the Philippine government's broader energy security agenda. Pangilinan framed the exploration drive as essential to achieving energy independence, arguing that domestic fuel sources, whether hydrocarbons or renewables like solar and wind, reduce reliance on imports.

PXP is also eyeing native hydrogen, a naturally occurring resource found in subsurface reservoirs, distinct from industrial hydrogen produced through electrolysis or steam methane reforming. The Philippine government recently integrated native hydrogen exploration into the existing petroleum service contract framework, providing regulatory clarity for investors interested in this emerging resource class.

Pangilinan confirmed PXP's interest in native hydrogen prospects when asked, signaling the company's willingness to diversify beyond conventional oil and gas.

Timeline and Execution Risk

While the new service contracts offer optionality, the path to production remains long and capital intensive. Exploration in frontier basins like the Sulu Sea carries high geological risk, and even successful discoveries require years of appraisal drilling, reservoir modeling, and infrastructure development before first oil or gas flows.

The company's ability to attract foreign partners will hinge on the commercial attractiveness of the acreage, the strength of its technical data, and the perceived stability of the Philippine regulatory and fiscal environment. PXP's existing partnerships and its track record in the country position it as a credible operator, but securing the capital needed to drill multiple high-cost offshore wells will test investor appetite in a region where geopolitical risk remains a persistent concern.

For now, PXP is betting that areas outside the West Philippine Sea dispute zone can deliver the reserves and cash flow needed to sustain the business while its frozen assets await a diplomatic resolution.

Asia's overnight moves, distilled into a five-minute read.

Capital Hunt for New Blocks

Bangsamoro Breakthrough

Indigenous Energy Ambitions

Timeline and Execution Risk

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