DOE to continue offering oil, gas prospects under PCECP
MANILA, Philippines — The Department of Energy (DOE) intends to continue offering oil and gas prospects under its Philippine Conventional Energy Contracting Program (PCECP) after it received bids for only four out of 14 pre-determined areas (PDAs) amid challenges in the country’s upstream sector.
During the opening of bids yesterday, the DOE received an application from Israel-based Ratio Petroleum Ltd. for Area 3 in east Palawan, two applications from local firms Esmaulana iGlobal Ventures Inc. and Sulu Sea Energy Resources Development Corp. for Area 6 in Sulu Sea, a joint application from Philodrill Corp. and PXP Energy Corp. for Area 7 in Sulu Sea, and an application from Esmaulana iGlobal Ventures Inc. in Area 10 in Agusan-Davao.
The other 10 PDAs under the program did not get any offers.
Meanwhile, the agency received nominations for a prospect in east Palawan from Sulu Sea Energy Resources Development Corp., in northwest Palawan from Troika Giant Power Corp., and in Ragay Gulf from Superior Shipyard Inc.
The offers would go through a 15-day evaluation. If these are found to be compliant and complete, these will then be forwarded to Centralized Review and Evaluation Committee (CREC), which would then recommend to the DOE Secretary for awarding, DOE Assistant Secretary Leonido Pulido said in an interview yesterday.
While only less than half of the PDAs received offers, the DOE is pleased with the results of the program as the country faces challenges in the upstream sector.
“Considering the context of the Philippines, we are currently competing with markets in Africa, competing for investments from the US. The tendency really is, shall we say, invest in areas that are really stable where the risk is less,” DOE Asec. Pulido said in an interview yesterday.
“We have to recognize the fact that the Philippines is a frontier market as far as development of energy is concerned. Number two, we do have territorial disputes. In the discussions we had with different agencies around the world, we do recognize the Philippines is not marketable. There is a difficulty, challenge there, and we are working on them. But considering this context, we’re happy to get a third of the PDA, we do have nominated areas,” he said.
The DOE official said potential investors also raised concerns over the P53.14-billion Commission on Audit tax case against the Malampaya consortium.
To help reinvigorate the country’s oil and gas exploration sector, the DOE will continue marketing the PDAs without offers to investors.
“Under this administration, the Secretary wants this program to keep going. The Secretary will have to sign a circular,” Pulido said.
The DOE is pushing for petroleum exploration and development activities in the country to serve as a cushioning measure against the volatility of oil prices, which has a direct impact on the costs of transport and power.
There are only 23 active Petroleum Service Contracts in the country.
Among all PSCs, the Malampaya deep water gas-to-power project is the most successful. As the largest natural gas industrial project in the Philippines, it recovered all costs in four years.
The DOE is committed to “Explore, Explore, Explore” in its pursuit of energy independence, security, and sustainability through the effective and reasonable development of all indigenous energy resources in the Philippines.
Launched in November last year, the PCECP offers 14 pre-determined areas, and the option for investors to propose their own exploration area, making oil and gas exploration a dynamic investment prospect for players in the energy sector.