The unsolicited proposal of Pangilinan-led oil and gas exploration firm PXP Energy Corp. for the strategic development and utilization of an integrated gas hub in the Malampaya project upon the expiry of its service contract (SC) by 2024 was denied, the Department of Energy (DOE) said.
Leonido Pulido III, DOE assistant secretary, told reporters yesterday the denial of the proposal was based on the Philippine Conventional Energy Contracting Program (PCECP) rules.
“The reason is very basic. We have PCECP and under that legal framework, we only have two ways to award service contracts and oil exploration permits – one is through pre-determined areas and two is through a nomination for an open area,” Pulido said at the sidelines of the DOE’s National Energy Consciousness Month briefing in Taguig City yesterday.
“However, what they did is they submitted an unsolicited proposal over an area with an existing service contract so we had to deny that,” he added.
Last month, PXP Energy eyed the operations of the Malampaya facility saying this is strategically positioned in the West Philippine Sea where other prospects such as the Sampaguita Field and the entire SC 72 operated by the company are also located.
The Sampaguita prospect’s development was put on hold in 2014 when the government suspended drilling activities in the Reed Bank amid a territorial dispute with China.
PXP Energy seeks to continue the development of other possible sources in the Malampaya field to ensure supply of indigenous natural gas resources that will bring in revenues for the government, apart from yielding substantial foreign exchange savings from reduced importation of coal and other fuels.