Philippines: New oil and coal contracting round to cover 4.8-M ha. prospecting area

Philippines: New oil and coal contracting round to cover 4.8-M ha.
prospecting area

A NEW contracting round is in the works for petroleum and coal, the
Department of Energy (DoE) said on Wednesday, in a move that the agency
hopes to create wealth for the industry to fund more energy development
projects.

Ismael U. Ocampo, assistant director of the DoE's energy resource
development bureau (ERDB), said the government hopes the new contracting
program will discover another Malampaya, which supplies a number of power
generation plants that deliver about 20% of the country's electricity
requirements.

"We will be conducting the energy contracting program for petroleum and
coal, and we are targeting December as our launching month. So hopefully
we'll be discovering additional reserves," said Ismael U. Ocampo, assistant
director of the DoE's energy resource development bureau (ERDB).

He made the statement during a press conference to launch the department's
information campaign called "E-Power Mo" at the Philippine International
Convention Center.

Mr. Ocampo said the program would be the sixth Philippine Energy Contracting
Round, a competitive system of awarding service contracts for petroleum and
coal prospecting areas.

During the press conference, Undersecretary Felix William B. Fuentebella
described ERDB as "the bureau that creates wealth for all of us. "If the
bureau discovers something" the energy resource development fund becomes
bigger, he added.

"As far as the moratorium (in disputed areas) is concerned, we have always
deferred to the DFA (Department of Foreign Affairs). In the conduct of this
[contracting program] it will be subject to clearance from the DFA," he
said.

Mr. Ocampo said he hopes the new contracting program will discover another
Malampaya, referring to the offshore Palawan gas find that supplies a number
of power generation plants in Batangas that deliver about 20% of the
country's electricity requirements. The government receives a portion of the
revenue from the project.

He said the areas to be offered under the new contracting program include
parts of the West Philippine Sea, Sulu sea and areas around Palawan
province. In the fifth round the DoE offered 11 areas with a total scope of
about 4.8 million hectares.

Mr. Ocampo expects issues in the past contracting rounds to be resolved,
including the lifting of a moratorium on oil exploration in parts of the
West Philippine Sea. The ban was imposed by the DoE as some contract areas
fell within the scope of the arbitration case filed by the Philippines
against China.

On July 12, 2016, the Permanent Court of Arbitration in The Hague in the
Netherlands ruled that Reed Bank is within the Philippines' exclusive
economic zone as defined under United Nations Convention on the Law of the
Sea.

Mr. Ocampo said he expects the moratorium to be lifted before December. He
said he received information that the DFA was drafting a "directive"
instructing the DoE to resume oil and gas exploration in the West Philippine
Sea.

He said the department will try to conduct seismic tests in the area and if
China does not complain, then exploration might proceed. He said Filipino
fishermen in the area were able to fish unhampered. He said he would be
following up with the DFA on the status of its directive.

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Link to Original Article:
http://www.bworldonline.com/content.php?section=Economy&title=new-oil-and-co
al-contracting-round-to-cover-4.8-m-ha.-prospecting-area&id=148182

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com