DOE sees further delay in oil drilling contracts

MANILA, Philippines - The Department of Energy (DOE) expects a further delay in the awarding of petroleum drilling contracts due to pending territorial disputes on areas set be auctioned off, a top DOE official said.

In a press briefing, Energy Secretary Carlos Jericho Petilla said despite the delay in the award of oil exploration contracts, the department is set to award 11 coal contracts before the end of the year.

He said they hope to complete the final screening of the coal contracts and sign them within the week.

Petilla declined to give the identities of the 11 winning contractors but assured that they have rigidly reviewed the contracts.

On the petroleum contracts, he said they would be submitting the final evaluation to Malacanang by early next year.

The DOE evaluation, he said, take into consideration the technicalities of the contracts including the financial and environmental side.

He pointed out the political aspect of the petroleum contracts, particularly those that would be part of the so-called “disputed areas”, would still need a go-signal from the Department of Foreign Affairs (DFA).

“We need further time for this. We can’t promise to give a timeframe as this is a very sensitive political matter and the DOE only deals with the technical side of it and we still have to seek the opinion of the DFA regarding the matter,” he said.

“Everything we do has to be cleared with the DFA specially on the issue of drilling within the disputed areas. It is not only energy that is at stake here. We do not want to complicate things,” he said.

According to Petilla, they plan to hold another round of contracting for oil and coal once everything with the previous contracting rounds have been completed.

From 30 coal contracts, the DOE has trimmed it down to 11. For oil contracts, the DOE is evaluating 11 applicants from the the previous 15.

Among the frontier basins being eyed for oil contracts include the West Luzon Basin, West Masbate-Iloilo Basin, Ilocos Basin and Bicol Shelf Basin.

Area 1 in Cagayan received three bids from Black Swan Resources, Frontier Oil Co. and Planet Gas Ltd. but the three companies failed to fully comply with the requirements of the department.

Area 2 in Central Luzon received a bid from only one bidder, Clean Rock Renewable Energy Resources, but it was also rejected for non-compliance.

Area 7 in Mindoro Cuyo received a bid from NorAsian Energy Philippines Inc., the local unit of Australian firm Otto Energy Ltd., but its bid was also rejected.

Area 10 in East Palawan drew interest from Forum Pacific Inc. whose bid was accepted.

Area 11 in Cotabato received two bids from Forum Pacific and Helios Mining and Energy, which were both accepted.

Area 12 also in Cotabato received a bid from three companies of which two were accepted. Dil Moro Energy Corp. and Min Energy Pty. Ltd were accepted while Monte Oro Resources Energy Inc.’s bid was rejected.

LOYZ Oil Pte. Ltd. submitted a bid for Area 14 in East Palawan and was accepted.

Area 15 in the Sulu Sea drew the most bids of which three complied. The bids of The Philodrill Corp and Philex Petroleum Corp.; Mitra Energy Ltd. (with Kuwait Foreign Petroleum Co. and Tap Oil) and Forum Pacific were accepted but the department rejected the bid of NorAsian.