Department of Energy eyes foreign firms for oil surveys

MANILA, Philippines - The Department of Energy (DOE) wants to tap foreign firms to conduct expensive surveys on oil and petroleum resources in offshore Palawan and Sulu Sea Basin.

The partnership, which is under review by the DOE, targets improving available data on resources and encourage more investors, an official said.

“What happened in (Petroleum and Energy Contracting Round 4) is we have been approached by a lot of seismic companies to shoot data in the entire Northwest Palawan area and the entire Sulu Sea Basin,” said DOE Undersecretary Jose Layug Jr.

Layug said several service contract areas included in the PECR 4 auction received no offers from investors given the lack of data.

In April, the DOE received 16 bids for eight blocks under PECR 4. Last year, the DOE launched PECR 4, offering 15 new gas exploration areas nationwide that will require around $7.5 billion in investments.

“There are proposals we are currently reviewing for seismic studies,” Layug said.

“These are international companies...The government does not have the capacity to conduct its own seismic (survey) because it is very expensive to shoot data,” Layug said, adding that benchmark cost for a single seismic survey is around $2 million.

Geophysical surveys like seismic studies can indicate features in the oil and petroleum reservoir.

Layug said data from the seismic survey is the basis for a proposed work program.

“What is important is to have a meaningful seismic study because that is how we attract a lot of investors,” Layug said.

The DOE previously allowed Western Geco International Ltd. to conduct a $3-million seismic study in 2002, Digicon Berhad in 1992 and Singapore-based Petroleum Geoservices Asia Pacific Ltd. in 1996.

Layug said the partnership will not prompt the government to spend. It can even lead to government revenues when seismic survey firms sell data to various firms under DOE supervision.

Through the seismic data, a company can propose how many wells they plan to drill to measure resources.

Under the PECR 4 rules, the company with the most aggressive work program will bag the service contract for a specific area. The DOE is targeting the completion of the technical review of all bids for new petroleum service contracts within this month.

Service contracts that were 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.