Energy revises rules on awarding of petroleum service contracts

Energy Secretary Alfonso Cusi signed a new circular that revises the process in awarding petroleum service contracts.

The circular, DC 2017-12-0017, adopts the Philippine Conventional Energy Contracting Program of awarding petroleum service contracts and creating the review and evaluation committee.

“The DoE desires to implement a simpler and faster public contracting program by nomination through publication to facilitate the acceptance of applications for PSCs from interested applicants at any given time which is deemed to be more responsive if the development of the country’s petroleum resources is to be intensified,” the circular stated.

Under the circular, applicants will nominate the areas of their interest. Once approved by the review and evaluation committee, the applicant will publish its nominated area.

The nominated area will then be subject to challenge by other parties.

Upon publication of the nominated area, interested parties will have 60 days from the date of publication to submit their respective applications for the said area.

The committee will open the submissions one day after the 60 day deadline of submission.

The applicants will be ranked basked on the following criteria; legal qualification, work program, technical qualification and financial qualification.

“In case of two or more applications over the same area, the highest ranking application who meets the legal, technical and financial requirements shall be selected,” it said.

State-run Philippine National Oil Co. or subsidiary PNOC-Exploration Corp. has the option to take a 10-percent interest in service contracts with one or more Filipino participants and up to 15 percent in service contracts with no Filipino participants.

Cusi earlier said the department was looking at a Swiss Challenge program to replace the traditional energy contracting round where the government offers the petroleum areas to investors for exploration and development under the Philippine Energy Contracting Round.

“What makes it different is, before, you wait for DoE for the announcement that we’re going to open this area for exploration for contracting, so development is slow. Right now, some have started studies and they want to explore that area,” Cusi said.

“With the new program, any proponent can come up with a proposal that they want to explore the area. They will identify and offer to develop it. What DoE will do is DoE will publish that and subject that to CSP [competitive selection process],” Cusi said.

The government was supposed to launch the sixth contracting round for oil and gas exploration in December.

There are 29 active petroleum service contracts in the Philippines with Shell Philippine Exploration Corp., Total E&P, Otto Energy Ltd., PNOC Exploration Corp., Nido Petroleum ltd., The Philodrill Corp., Pitkin Petroleum Corp. and Galoc Production Co. as among the government’s operator-partners.


Flores, A. M. S. (January 23, 2018). Energy revises rules on awarding of petroleum service contracts. Manila Standard. Retrieved from

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