Oil exploration firms to elevate concerns to P-Noy

MANILA, Philippines - The Department of Energy (DOE) will elevate to President Aquino the concerns of oil exploration companies after the Supreme Court ruled that oil exploration in Tañon Strait is unconstitutional.

“We will elevate the matter to the President because it involves contracts,” DOE Secretary Zenaida Monsada said in a briefing.

The agency’s Energy Resource Development Bureau and legal department is also set to come out with position paper for the SC, DOE Assistant Secretary Patrick Aquino said.

In its position paper submitted to Office of the Executive Secretary, the Philippine Petroleum Association of the Upstream Industry (Oil and Gas) Inc. (PAP) warned of “potential implications” following the high court’s order to stop the exploration, development and exploitation of petroleum resources within Tañon Strait.

“It signifies that all Service Contracts entered into by the Government of the Republic of the Philippines (“Government” or “GRP”) with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of petroleum, but signed only by the Secretary of the Department of Energy (“DOE”), not by the President, are null and void for being unconstitutional,” the organization said.

PAP is composed of foreign and local oil and gas players.

The Supreme Court ruled last year that the oil exploration in Tañon Strait, which is believed to have oil among mineral deposits, is unconstitutional.

Therefore, Service Contract (SC) No. 46 between the government and Japan Petroleum Exploration Co. Ltd. (JAPEX) has violated the 1987 Constitution, Republic Act 7586 or the National Integrated Protected Areas System (NIPAS) Act of 1992, and Presidential Decree No. 1586, which established an environmental impact statement system.

It also failed to comply with the safeguards required by the 1987 Constitution, including that it be (a) authorized by a general law; (b) signed by the President, and, (c) reported to Congress.

The Supreme Court noted that while there is a general law on exploration which is Presidential Decree No. 87, SC-46, it was not signed by the President and was entered into in 2004 only between the DOE and JAPEX.

Tañon Strait, which separates Cebu and Negros islands, is home to marine animals and has been considered to be important in the development of ecotourism in the area.