3 groups eye oil prospects in Palawan, Sulu Sea

The Department of Energy (DOE) is set to start negotiations with three groups for possible oil exploration contracts in offshore Palawan and Sulu Sea basins.

Energy Secretary Raphael P.M. Lotilla said the three groups were among those that have submitted the most qualified proposals under the Philippine Energy Contracting Round (PECR) 2005.

Lotilla said the joint venture of PNOC-Exploration Corp. (PNOC-EC) and Nido Petroleum Philippines Pty. Ltd submitted proposal for the exploration of Area 1 or Southwest Palawan.

He said Burgundy Global Asset Management Corp., on the other hand, is interested in Area 2 (Northeast Palawan) and Area 3 (Southeast Palawan).

According to Lotilla, the joint venture of Ranhill Berhad and Phil-Mal Petroenergy Corp., meanwhile, has expressed keen interest to develop Area 4 or the Sulu Sea Basin.

The energy chief said under the PECR 2005, at least six proposals were evaluated by the DOE.

But the department’s contract negotiating panel for petroleum, headed by Energy Undersecretary Guillermo Balce, said only four proposals were able to meet the financial, legal and technical qualifications to explore and develop the respective areas.

The four petroleum contract areas, Lotilla said, cover a total of 49,789 square kilometers in shallow to deep waters.

"We are hopeful that a service contract for each area will be finalized soon in order to start explorations," Lotilla said.

The Philippine government has embarked on an aggressive development of the country’s energy resources through improved contracting and bidding schemes and enhanced fiscal incentives in efforts to increase the country’s energy self-sufficiency.

In 2003, the DOE launched PCR-1 wherein exploration blocks near oil producing areas in Northwest Palawan and in vast frontier basins in Southwest and East Palawan, Sulu Sea and Reed Bank were offered for investors. As a result of this, two blocks were awarded to BHP Billiton Petroleum through Service Contract 56.

Since Dec. 2004, 16 petroleum exploration service contracts have been awarded with minimum financial resources amounting to $ 215.31 million committed to the proposed work program.

Continuing the gains of PCR-1, the DOE conducted PECR 2005 last August wherein it offered investors opportunities for exploration and development not only of petroleum resources but also exploration and development of coal and geothermal resources. Seven areas were offered for exploration, development and production of the country’s coal resources while 11 areas were offered for geothermal exploration, development and/or direct utilization for power generation use and other geothermal applications.

More than 20 local and international upstream companies, including the four selected for petroleum service contracts negotiations, have evaluated the investment opportunities during the PECR 2005 investment promotions.