MANILA, Philippines — President Rodrigo Duterte has signed an executive order (EO) allowing the government-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) to enter into farm-in/farm-out agreements.
Duterte signed on Tuesday EO 80 which rationalizes the rules for engaging third-party participants under petroleum service contracts. A copy of the order was shared to the media on Thursday.
President Duterte issues EO no. 80, rationalizing the rules for engaging third party participants under petroleum service contracts. @inquirerdotnet pic.twitter.com/dNIZhZQAN2
— Darryl John Esguerra (@drrylesguerra) May 30, 2019
PNOC-EC, the upstream oil, and gas subsidiary of the Philippine National Oil Company, usually participates in petroleum service contracts either as an operator or non-operating partner.
Under the order, third parties can now participate in the service contracts awarded by the government to the PNOC-EC.
Farm-in/farm-out refers to a practice of allowing third-party participation to “spread the risk inherent in oil and gas exploration, development, and production.”
The entity acquiring the participating interest considers the transaction as a “farm-in”, while the entity transferring such interest considers the transaction a “farm-out.”
“In all cases, PNOC-EC shall enter into farm in/farm out agreements only with reputable, technically competent and financially capable entities,” the EO said. (Editor: Cenon B. Bibe Jr.)
READ: PH, China oil pact still a go