Petroleum, coal opportunities to be finalized in West Philippine Sea – DOE

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The Department of Energy (DOE) is completing its final list of areas that will be offered new petroleum and coal exploration contracts at the sixth Philippine Energy Contracting Round (PECR) in December, including some sectors in the disputed West Philippine Sea (WPS).

The Energy Department is also settling offers in the Sulu Sea and the Palawan province as the agency is putting bets on a better crude oil price environment towards the end of the year, DOE Energy Resource Development Bureau assistant director Ismael Ocampo said in a briefing at the DOE-hosted conference “E-Power Mo” on Wednesday.

However, it is aware of the moratorium on all exploration and drilling work in Service Contracts (SC) 72 and SC 75 of December 2014 and 2015, respectively, in which the DOE still has to consult with the Department of Foreign Affairs (DFA).

“For those contracts located in the West Philippine Sea, the DOE will need to secure clearance from the DFA first,” DOE Undersecretary Felix William Fuentebella said, explaining that discussions with the DFA on the matter will occur “within the month.”

SC 72 covers the Sampaguita natural gas prospect at the Reed Bank towards West Palawan while SC 75 is in the offshore Northwest Palawan Basin. Economic developments in these areas remain suspended despite Duterte’s efforts in strengthening its relations with China.

But once the Energy Department becomes successful in coaxing the DFA to lift the moratorium, Ocampo said, “We can already finalize the areas to be offered in blocks in the West Philippine Sea for the next PECR.”

PECR is a transparent and competitive regime authorized by the Energy Department to develop and employ the country’s indigenous oil and gas resources through service contracts with licensed local and foreign energy investors.

The DOE is pushing its target launch in December this year, with the prospect of discovering an additional Malampaya reserve in the future.

DOE is also certain that they will meet their goals ahead of the PECR 6 launch, despite having pending contracts to be given to previous awardees of the PECR 5 due to legal impediments in the oil and gas exploration industry such as Commission on Audit and Japan Petroleum Exploration Co. Ltd. issues.

“The DOE is hoping to award the pending contracts before launching PECR 6,” Ocampo said.

The last PECR 5 was held in June 2015, where it showcased eleven petroleum exploration contracts for exploration and development, totaling to more than 4.7 million hectares in West Luzon, Southeast Luzon, West Masbate/Iloilo, East Palawan, and Recto Bank.

A petroleum service contract has a seven-year exploration period that can be extended up to ten years.

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