DOE Petroleum Contracting Program Pique Investors' Interest

TAGUIG CITY - One of Department of Energy (DOE) Secretary Alfonso G. Cusi's initial directives upon assuming his post in 2016 was to enhance what was supposed to be the 6th Philippine Energy Contracting Round (PECR). 

After months of evaluating the previous PECRs, as well as preparations and consultations with stakeholders, the DOE came up with an improved program for awarding petroleum service contracts. One that is flexible, accommodating, and continuous, while maintaining the transparency and fairness of the process. This program is what is now known as the Philippine Conventional Energy Contracting Program (PCECP).

The PCECP is pursuant to DOE Department Circular No. DC2017-12-0017 signed on 27 December 2017. Acceptance of nominations began on 7 February 2018, while the first batch of Pre-Determined Areas (PDAs) were launched on 22 November 2018.

To date, the DOE has received a total of six requests for area clearances from multiple companies for the Northwest Palawan-Recto Bank area. From these requests and upon confirmation by the DOE,interested companies may submit their Letter of Intent for the proposed area for nomination. Thereafter, DOE will notify the proponents to publish their nomination which will be subject to challenge within 60 days from publication.  The required documents for legal, technical and financial evaluation will be submitted after the lapse of the 60 day period and If the submission/application is compliant with the existing laws and guidelines, DOE will recommend to the President the execution of the appropriate Service Contract.

Even before the Department accepted nominations, many companies that have been meeting with the DOE had expressed their interest towards the Northwest Palawan and Recto Bank areas, with some firms already having nominated various areas in the disputed zones. Among said companies is PXP Energy, the operator of Service Contract 72 in Recto Bank. 

Despite the current situation involving the contentious areas, investors remain eager and committed to explore the area for petroleum resources. In fact, noteworthy companies, particularly Shell Philippines Exploration B.V. and NWP Ventures, both UK-based companies, have likewise nominated blocks for petroleum service contract applications within the disputed areas. Multiple companies, including Spanish firm Repsol, have also shown interest in farming in the West Philippine Sea area. 

Many other interested parties are awaiting the government's policy direction in the West Philippine Sea and have expressed their desire to explore the area should the current Moratorium due to Force Majeure be lifted.

Other areas of interest include the Sulu Sea, Quezon province, Ragay Gulf, and Mindoro. 

Moreover, the opening of applications held at the DOE this week affirms the continued interest of investors in the country’s upstream petroleum industry. The DOE is currently evaluating applications for four Pre-Determined Areas and three Nominated Areas coming from six companies/joint ventures, namely Ratio Petroleum Ltd., Philodrill Corporation and PXP Energy Corporation (JV), Sulu Sea Energy Resources Development Corporation, Esmaulana Global Ventures Company, Inc., Troika Giant Power Corporation, and Superior (SG) Shipyards Corporation.

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