DOE urges more oil exploration activities

The Department of Energy is encouraging more investments in petroleum exploration in the country to help bring down oil prices, Energy Secretary Angelo Reyes said.

At the awarding of four new exploration contracts yesterday, Reyes said the signed deals “is another step forward to realizing our goal of energy independence.”

“The Philippine government has been encouraging the private sector to participate in its energy independence program that aims to reduce dependence on imported fuels,” he said.

The DOE awarded petroleum service and coal operating contracts (COCs) to Polyard International Co. Ltd. (PPICL), Guidance Management Corp. and IL Rey’s Coal Mining and Exploration Corp. to explore and develop contract areas offered at the energy contracting round.

The department also signed the conversion of Forum Cebu Coal Corp.’s COC from exploration to the development/production stage.

The DOE expects to sign more exploration contracts this year not only to spur investment in the upstream oil sector but also cut down dependence on expensive fuel oil.

From PPICL alone, the DOE expects a total projected investment of $7.2 million for the seven-year petroleum exploration contract.

This brings the total exploration investment to $464.05 million since 2004. To date, there are now 33 active service contracts.

The petroleum contract area, Area 2, awarded to PPICL is located onshore in the Central Luzon basin. The company plans to conduct a seismic survey over the block in order to identify potential sites for the drilling of at least two wells.

The COC awarded to GMC is in Calatrava, Negros Occidental and Bayawan, Negros Oriental and covers over 6,000 hectares.

In July, GMC was awarded a geothermal service contract in the Amacan geothermal prospect in Compostela Valley.

IRMEC, a longtime player n the coal industry through its exploration and development of coal deposits in Northern Cebu through a previous COC with the DOE, was awarded a COC in Danao City, Cebu. The company will operate in two coal blocks in Danao with total calculated positive and minable reserves of 414,000 metric tons.

Forum Cebu’s COC 132, awarded to the company last February 2005, will be converted from exploration to the development/production stage. The contract area covers four coal blocks or about 4,000 hectares in the municipalities of Balamban and Naga in Cebu.