5 firms keen on RP oil, gas reserves

About five firms have expressed interest in oil and gas reserves in the Philippines, a Department of Energy (DOE) official said.

"These firms are known players in Southeast Asia. They signified interest to attend the contracting round," Energy Undersecretary Eduardo Mañalac said.

By Aug. 5 this year, the DOE will start the technical, legal and financial evaluation of hydro-carbon (natural gas) potential in the country as part of the so-called First Philippine Petroleum Public Contracting Round (PCR-1).

Last month, the government announced that it will offer 46 new exploration blocks close to oil and gas discoveries and producing fields within the Philippine territory thru the PCR-1.

PCR-1 is a new mechanism of awarding concessions in oil and gas explorations through competitive public bidding where highly prospective petroleum acreages in the Northwest Palawan and vast frontier areas in Southwest and East Palawan, Sulu Sea and Reed Bank will be placed on the market for application.

PCR-1 replaced the DOE’s current licensing procedure grants on a "first-come, first served basis" negotiations. This method precludes any other interested applicants from applying for the same.

Energy Secretary Vincent S. Perez said the DOE would like to build on the technical and commercial success of the $4.5-billion Malampaya deep water gas-to-power project in the offshore Palawan area, the single biggest investment in the Philippine exploration business.

Under the PCR, the DOE will open for licensing a total area of 215,000 square kilometers.

These are interpreted to contain the highest potential for large oil and gas accumulations. The anticipated prospects are believed analogous to those that have been proven productive in Brunei, Sabah, Indonesia as well as in Vietnam and South China.

The area is seen to contain as much as 250 million barrels of oil equivalent or 1.5 to two trillion cubic feet of gas reserves. Deeper wells, Mañalac said, are expected to be drilled in the area costing about $20 million to $30 million a well.

Manalac said they expect the public bidding and awarding of the service contracts by March and April next year, respectively.

"With this timetable, we hope to see more oil and gas exploration activities in the last quarter of 2004," Mañalac said.