DOE reviews appeal filed by 2 disqualified firms

MANILA, Philippines - The Department of Energy (DOE) is reviewing the motion for reconsideration filed by seven firms that were initially disqualified from the bidding of petroleum and oil service contracts.

Robust participation from big players like Pangilinan-led Philex Petroleum Corp. is likewise expected for three more petroleum contract areas up for bidding in July, a DOE official said.

“We are still drafting our report for endorsement. We are currently studying the grounds for reconsideration and we will apply the rules appropriate with the DOE circular,” said DOE Undersecretary Jose Layug.

For the Philippine Energy Contracting Round (PECR) 4, Layug said the DOE received 16 bids early this month, of which all seven that were initially disqualified filed motions for reconsideration.

“For the disqualification which are not grounded on substantive issues, more or less we can consider them. But those applications with substantive deficiencies we have to abide by our guidelines,” Layug said.

Substantive defects include the lack of financial statements and the absence of economic and development concept for the service contract.

More private sector participation is expected for the bidding of three resource-rich blocks in Northwest Palawan in July.

“We are hoping when we receive the bids in July 31, the big boys have already joined,” Layug said.

Opening for bids in Areas 3, 4 and 5, which are adjacent to the resource-rich Spratlys Islands being claimed by China, is scheduled in July.

“But of course, even if they do not, again in the Philippines the trend has always been small companies coming in and later on the big boys farm in,” Layug said.

Philex Petroleum, the exploration arm of Philex Mining Corp., is interested to bid for Area 5, its chairman Manuel V. Pangilinan said.

Philex Petroleum and Philodrill Corp., which are both listed in the local bourse, submitted a bid for Area 15 located in Sulu Sea. The bid, which is part of PECR 4, was accepted by the DOE early this month.

Pangilinan said Philex Mining allotted P1 billion for capital expenditures of subsidiary Philex Petroleum this year.

Last July, the DOE launched PECR 4, offering 15 new gas exploration areas nationwide that will require around $7.5 billion in investments.

Service contracts subject to the May 4 bidding were Area 1 (544,000 hectares) in Cagayan; Area 2 (676,000) in Central Luzon; Area 6 (840,000) in Mindoro Cuyo; Area 7 (844,000) in Mindoro Cuyo; Area 8 (840,000) in East Palawan; Area 9 (840,000) in East Palawan; Area 10 (640,000) in East Palawan; Area 11 (600,000) in Cotabato; Area 12 (456,000) in Cotabato; and Area 15 (482,000) in Sulu Sea.

Qualified bidders include Forum Pacific Inc., the partnership of Philodrill Corp. and Philex Petroleum, Dil Moro Energy Corp., Min Energy Pty Ltd., Loyz Oil Pte Ltd. of Singapore and Mitra Energy Ltd. of Malaysia.