SUMMARY
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MANILA, Philippines – As part of the country’s assertion of its sovereign rights over the potentially energy rich but disputed areas in the South China Sea (also West Philippine Sea), the Philippine government has awarded the contract to explore oil and gas in Area 4 northwest of Palawan.
The winning consortium – and the only bidder for this energy bloc – consists of Philex Petroleum Corp., PetroEnergy Resources and PNOC Exploration Corp. (PNOC-EC), according to a notice from the Department of Energy (DOE).
Philex Petroleum Corp and PNOC-EC both announced receiving the notice of award from the DOE in separate disclosures to the PSE on Friday, February 15.
The firms received the contracts under the DOE’s 4th Philippine Energy Contracting Round (PECR 4), which was launched in June 2011 as part of the government’s plans for reducing dependence on imported oil. The DOE accepted the bids way back in July 2012.
The consortium
The tension between the Philippines and China over the South China Sea has dampened investor interest in the energy blocs the Philippine government has auction off.
The winning consortium for Area 5 winning consortium was the lone participant during the July 2012 bidding.
The members of the winning consortium have stakes in existing exploration activities.
PNOC-EC is part of the consortium that is operating the Malampaya deep water gas-to-power project, the Philippines’ largest existing natural gas project located near Area 4.
Philex Petroleum and its sister firm PetroEnergy are both part of Manuel Pangilinan-led business group. Philex Petroleum is part of a consortium that was granted Service Contract 72 (SC-72), which gives the group the right to explore Reed Bank (or Recto Bank).
Reed Bank lies near, and may have bigger gas deposits than, Malampaya off Palawan.
Contracting round
In July 2012, the Department of Energy offered 5 contracts, with more than 10 million hectares, via the PECR 4.
The energy department has endorsed the awarding of 5 contracts, which involve the exploration and development of prospective oil and gas blocks, to Malacañang.
Other groups that won the contracts include
- Pitkin Petroleum and Philodrill Corp. for Area 5 in Northwest Palawan,
- NorAsian Energy Philippines Inc., for Area 7 in Mindoro Cuyo
- Australian companies Planet Gas for Area 1 in Cagayan
- Loyz Oil for Area 14 in East Palawan
According to Energy Undersecretary Ramon Allan Oca, the investments vary depending on petroleum seismic studies, with costs going from $5 million to $100 million per well. – Rappler.com
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