Palau Pacific Energy to explore the remote northern isle

By Bernadette Carrerion

KOROR, Palau (Marianas Business Journal, June 20, 2011) –The Kayangel State government has authorized the Palau Pacific Energy Inc. to conduct oil exploration drilling in at the waters of Velasco Reef until Dec. 31, 2012. Although the state legislature previously failed to grant the extension after the May 15 deadline, Kayangel Gov. Edwin Chokai approved the company’s request for extension. The agreement between PPE and Kayangel State authorizes the governor to either approve or deny the extension request.

[PIR editor’s note: Kayangel is an island state located in the far north of Palau, above Babeldaub.]

According to recent reports, PPE has not been able to drill, citing “circumstances beyond its control” such as world economic recession. The company also reportedly blamed the previous administration at the national level for the delays in the venture. PPE stated that with the extension, oil exploration can proceed with adequate time to conduct the test well-drilling research. The test drilling seeks to determine if commercial quantities of oil and gas are present in the sub-surface of the Velasco Reef.

PPE had a license agreement with the national government and Ngarchelong State which expired this year. However, it intends to re-negotiate the agreement if oil or gas is discovered in Kayangel State. PPE added that it will be negotiated under the terms and condition set by the petroleum bills currently pending before the Palau Congress.

Velasco Reef, located just 20 miles north of Kayangel, is touted as a treasure trove of marine life.

Marianas Business Journal
Copyright © 2011 Glimpses of Guam Inc., All Rights Reserved

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