Oil exploration bids on hold

    Map of Area 4 in East Palawan Basin. The last service contract awarded by the Philippines to an Israeli company.
    Map of Area 4 in East Palawan Basin. The last service contract awarded by the Philippines to an Israeli company.

    The Department of Energy (DOE) through its Energy Resource Development Bureau, said some applications for exploration in oil and gas resource areas are on hold due to the ongoing discussions with the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

    “Currently, there are five applications that are recommended to award for a petroleum service contract but due to the ongoing bilateral discussions with BARMM, two applications were put on hold,’’ the DOE said in a statement.

    Discussions are being held to ensure offers from investors will also be acceptable to the local counterpart of the DOE in BARMM.

    The agency said the applications are part of the Philippine Conventional Energy Contracting Program (PCECP).

    Interested investors can apply for service contracts via bidding for pre-determined areas or by nomination of their preferred areas.

    The DOE revised its service contract awarding mechanism for transparency. This allows government to develop and utilize indigenous petroleum resources under a service contract with qualified local and international exploration companies.

    As of third quarter of 2019, a total of 21 requests of area clearances which resulted in seven letters of intent from six companies were received by DOE for PCECP. Meanwhile, eight companies availed in data viewing where six of those have successfully purchased data for petroleum exploration.

    Currently, there are 19 active petroleum service contracts in the Philippines with Shell Philippines Exploration, Total E&P, PNOC-EC, Nido Petroleum, Philodrill, PXP Energy and Galoc Production Co. as operator-partners.

    The most recent oil exploration agreement awarded by the DOE was given in 2018 to Israeli firm, Ratio Petroleum Ltd. for Area 4 located at the East Palawan Basin.

    The contract allows the company to explore the area covering 416,000 hectares with a projected minimum total expenditure valued at $34.3 million to be derived from studies, data gathering and drilling activities over the initial seven-year contract duration