The Department of Energy (DOE), together with the Ministry of Environment, Natural Resources, and Energy (MENRE), is conferring the 1st Coal Operating Contract (COC) for the Pre-Determined Area (PDA) in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) to Filipinas Systems, Inc. (FSI).
The contract is for a coal exploration initiative in Kapa and Tagaloan II in Lanao del Sur.
“The awarding of the 1st COC in BARMM is a landmark moment for both governments. It reflects our collective commitment to advancing energy development and resource management in the region, empowering the BARMM to play a key role in the country’s energy future. This partnership will not only foster energy independence for the Bangsamoro region but also create pathways for sustainable economic growth and development,” said Energy Secretary Raphael Lotilla.
As part of its coal service contract, FSI plans to allocate nearly Php 19 million for a two-year exploration program. Beyond this, the company aims to support local communities by offering Php 150,000.00 annually in scholarships for qualified residents from the area once the project moves into the development and production stages.
This development resulted from the historic signing of the Intergovernmental Energy Board (IEB) Circular in July 2023 by DOE Secretary Lotilla and MENRE Minister Akmad A. Brahim.
The Circular created a cooperative structure between the National Government and the Bangsamoro Government, facilitating the shared responsibility in awarding Petroleum Service Contracts (SCs) and Coal Operating Contracts (COCs) in the BARMM region.
FSI, led by Mr. Felipe A. Cruz, operates under the construction firm FF Cruz & Co. Inc., which is actively expanding into the mining industry. The company previously held Coal Operating Contracts (COCs) in the Payao and Siay coal districts of Zamboanga Sibugay, awarded in 1987 and 1989.
In 1996, FSI and PNOC-EC, through a joint venture, managed the coal reserves in two significant blocks (396 and 397) located in Imelda and Siay, Zamboanga Sibugay, with plans for integrated mining and production operations.
FSI has also agreed to provide financial contributions, including a Php 250,000.00 signature bonus, Php 250,000.00 for development support, and annual training funds of Php 75,000.00 during the exploration phase.
Annual training contributions will rise to Php 200,000.00 annually when the project transitions to the development and production stages, with the amounts evenly split between the DOE and MENRE.
