Investor interest in PECR 4 remains high

The Philippine government’s verbal row with China over the disputed Spratlys Island has not made a dent in the investor interest in the upcoming Philippine Energy Contracting Round (PECR 4), where 15 highly prospective oil and gas blocks will be offered for exploration and development.

At the sidelines of the launching of the National Renewable Energy Program on Tuesday, Energy Undersecretary Jose M. Layug Jr. stressed that these 15 blocks were all within Philippine territories and that “there’s no issue about that.”

“We’re not offering any block in the Reed Bank,” he further noted.

Layug pointed out that none of the over 100 prospective firms that had expressed interest in investing in the country’s upstream oil and gas sector even brought up the Spratlys issue because “they know all the areas we are offering are located within the Philippine territory.”

“And nobody is questioning that. In fact, the question to us is, when can you offer areas particularly in the Reed Bank? The Reed Bank is within the country’s 200-nautical mile exclusive economic zone,” Layug added.

In fact, Layug noted, there were a couple of state-owned Chinese firms that wanted to participated in the PECR 4 to be held this coming June 30.

The DoE is offering 15 contracts for the exploration, development and production of prospective oil and gas sites, in areas spanning across 7.92 million hectares in onshore and offshore Cagayan, Central Luzon, Northwest Palawan, Mindoro-Cuyo basin, East Palawan and Cotabato.

Among the areas eyed mostly by the investors were three blocks in the Northwest Palawan area, home to the Malampaya deep water gas-to-power project, the largest and most successful natural gas industrial project in Philippine history.

Many investors were also keen on five blocks within the Sulu Sea where petroleum exploration giant Exxonmobil Exploration and Production Philippines B.V. has already drilled four wells. Three out of these four wells have indicated presence of gas, a report that has further encouraged investors to look further at the Philippines for other potential petroleum sites.

“This is the best time to (conduct the PECR 4) especially with the high oil prices. Everybody wants to look for new exploration blocks at high-oil-price environment,” Layug said.

The PECR 4 forms part of President Aquino’s long-term plans to address the Philippines’ need for oil and gas and to reduce the country’s dependence on costly imported oil.