DOE, DENR move to ease investor concerns

The Departments of Energy (DOE) and Environment and Natural Resources (DENR) are forming a subgroup that will look into the potential problems that may be faced by local and foreign investors wanting to develop the country’s coal resources.

Energy Secretary Jose Rene D. Almendras said that the DOE and the DENR had forged an agreement to create a technical working group that will “hopefully align all the challenges” that can impede a coal mining project.

Almendras said that some companies had not been able to meet their working commitments under their respective service contracts because of factors such as opposition from various sectors and the overlapping of awarded blocks with the so-called protected environment areas as specified by the DENR.

Some provinces had also passed ordinances that will ban or hinder the completion of coal mining projects in the country.

“By having this agreement, the DOE and DENR will be able to coordinate early enough before the contracts are awarded to investors. This way, we hope that the rollout of investments is better and faster,” Almendras explained.

This move was in preparation for the planned awarding of 30 contracts to explore and develop coal blocks next year.

In December 2011, the DOE launched the fourth Philippine Energy Contracting Round for coal, in which it offered to investors 30 blocks.

These are located in Quezon, Camarines Norte, Albay, Sorsogon, Masbate, Occidental Mindoro, Oriental Mindoro, Negros Occidental, Cebu, Bohol, Agusan del Norte, Misamis Oriental, Agusan del Sur, Surigao del Sur, Compostela Valley, Davao Oriental, Lanao del Sur, Lanao del Norte, South Cotabato, Sultan Kudarat, Sarangani, Zamboanga del Norte and Zamboanga Sibugay.

The DOE expects to rake in at least P2.4 billion in initial investments from the awarding of the 30 coal operating contracts.

These investments are expected to be made within the initial four-year exploration period provided for the winning bidders.

Almendras said that the government continues to encourage private sector participation in its energy independence program, which aims to reduce overdependence on costly imported fuels.

It is believed that through intensive exploration, the government will be able to find additional reserves to meet the local demand for coal.