DoE bullish on bidding of 15 oil, gas contracts
The Department of Energy (DoE) said at least $7.5 billion, or about P322.5 billion, in investments is expected to be infused in the oil and gas sector, once the 15 contracts for the exploration and development of highly prospective areas are awarded to investors.
The amount approximates the maximum investments required during the exploration stage alone, said Energy Secretary Jose Rene D. Almendras in a briefing following the official launch of the Philippine Energy Contracting Round 4 on Thursday.
During the exploration stage, companies will be drilling three to five wells.
Should these companies push through with their petroleum projects, the actual development and production may require bigger investments.
Almendras is optimistic that all the 15 contracts will be awarded to worthy and serious investors by early next year, given the “overwhelming interest” shown by the big petroleum exploration companies during the two road shows held recently in Singapore and Australia.
The 15 areas being offered are located at Cagayan, Central Luzon, Northwest Palawan, Mindoro-Cuyo, East Palawan, Cotabato and the Sulu Sea.
According to the DoE, resources from nine out of these 15 areas were estimated to hold as much as 5.48 billion barrels of oil and 39 trillion cubic feet of gas. These are interesting areas that will give investors a good possibility of finding gas and oil, it said.
Almendras was also quick to note that the areas for exploration and development under the PECR 4 were all within the country’s exclusive economic zone (EEZ) and there was non within any of the contested areas in South China Sea.
“The PECR 4 is envisioned to address the country’s energy supply through the exploration of local indigenous resources. Harnessing local resources will help the country meet its daily demand and reduce the importation of petroleum and petroleum products,” Almendras said.
“The more exploration that happens, the better the chances for (us) getting oil. We’re actually asked why we are rushing this. I think from the perspective of competitiveness, our neighbors and the rest of the world are not staying back in pursuit of hydrocarbons,” Almendras noted.
“Everybody is trying to rush the exploration and development because the present petroleum pricing is very encouraging for such investments. Also, we wanted to make sure that we don’t run out of investors and resources,” Almendras added.
Currently, only 10 percent of the prospective oil and gas areas in the Philippines are being explored by foreign and local companies, through 28 existing petroleum service contracts.
Investors interested in the 15 areas can secure the bid packages by July 30, after which they will be allowed to study the resources and prepare their respective bids within five months until December this year. Target awarding of the contracts was slated for early next year, said Energy Undersecretary Jose M. Layug Jr.
As early as now, Almendras warned investors that all nonperforming contracts would be canceled.
“We want investors who intend to explore and develop. We don’t want investors who will flip out on their contract obligations and cash in on these contracts by selling these to other investors,” Almendras said.
To date, the DoE has already canceled four petroleum service contracts held by a single petroleum exploration firm, which, Almendras said, had failed to deliver its commitments under the service contracts.
