DoE eyes royalties to pay off P1T debt
Energy Secretary Jose Rene D. Almendras: P1-trillion debt
MANILA, Philippines—Energy Secretary Jose Rene D. Almendras will seek Congress approval over plans to use royalties from the existing oil and gas projects to pay off energy debts amounting to almost a whopping P1 trillion.
“I am looking at the option not to charge that [P1 trillion debt] to consumers. How? Last year, I turned over $1 billion in net proceeds from oil and gas exploration. We need to reconstitute some of the existing laws so that the income from energy resource development can be used to pay off the debts,” Almendras said in his speech at the Security Bank Economic Forum on Wednesday.
These debts were incurred mainly by three energy agencies over the past years, namely, the Power Sector Assets and Liabilities Management Corp. (PSALM), accounting for almost P800 billion; National Power Corp. (Napocor), with roughly P50 billion; and National Transmission Corp. (Transco), with close to P100 billion.
Almendras explained that by using a portion of government royalties for repayments, PSALM may be able to reduce the amount of debts that would be passed on to consumers through the universal charge.
At present, PSALM has an application to collect from all power consumers P140 billion to pay for its debts. This will translate to the collection of 36 centavos per kilowatt-hour within a four-year period to cover the payment of stranded contract costs and a separate 3 centavos per kWh within a 15-year period to settle stranded debts.
“After you use the royalties to finance your energy promotion and other activities, eventually, someday you’re going to have more oil and gas producing fields like the Malampaya off Palawan and when that day comes, we’re going have the resources to reinvest into energy, including some of these obligations,” he explained.
Based on the estimates by the Department of Energy (DoE), the government may receive between now and 2015 some P115 billion from upstream petroleum companies, representing the country’s rightful share from the production of oil and gas from existing fields.
Data previously gathered by the Philippine Daily Inquirer showed that the Malampaya deep water gas-to-power project off Palawan will remain the biggest contributor to these government royalites, with an estimated share of P113.5 billion within that four-year period (2012 to 2015).
For this year alone, the Malampaya field is expected to contribute P29.62 billion; P28.74 billion next year; P27.86 billion in 2014; and P27.29 billion in 2015. The figures are expected to decline as the consortium embarks on Phases II and III, which will require $1 billion additional investment.
