DOE to bid out Camago contract

The Department of Energy (DOE) expects to bid out the contract for the development of Camago Malampaya Oil Leg (CMOL) by the first quarter of 2007, a top energy official said.

Energy Secretary Raphael P.M. Lotilla told reporters over the weekend that the Philippine National Oil Co. (PNOC), the agency tasked to take a lead in the CMOL development, is committed to carry out the public tender.

"We hope to push through with the development of this resource in the soonest possible time. First quarter is a good target," Lotilla said.

Lotilla said a technical group is currently formulating the financial and technical requirements for the prospective partner.

"These requirements will form part of the terms of reference for the tender," Lotilla said.

According to Lotilla, they want to make sure that the TOR would be acceptable to all the prospective bidders.

Despite a number of controversies on CMOL bidding, the energy chief has expressed optimism that there would be a number of new bidders that would join the CMOL’s public tender.

Lotilla said a number of British exploration firms have already signified interest to join the CMOL bidding.

For his part, Energy Undersecretary Guillermo Balce said the guidelines for the bidding should be completed within 16 months.

"The longer the (bidding) process is delayed, the more the pressure to extract the oil from the Malampaya project would be difficult," Balce said.

Balce said based on the timetable set under the terms of service (TOS) issued by the DOE, PNOC should complete the feasibility study on CMOL within 24 months.

"The TOS was issued last year so PNOC has 16 months to be able to tell us if it is feasible or not to proceed with the production of oil in the Malampaya oil rim," Balce said.

The CMOL is located beneath the existing natural gas infrastructure development under Service Contract (SC) 38 of a Malampaya consortium composed of Shell Philippines Exploration B.V. (SPEX), Chevron Texaco and PNOC-Exploration Corp.