DOE expects ‘successful’ petroleum contracting round

The country – via the efforts of the Department of Energy (DOE) – will place its bet again on prospective oil and gas discovery, and it expects to get this moving headway in this week’s launching of the government-designed Philippine Conventional Energy Contracting Program (PCECP).

A mix of close to 300 industry players as well as interested investors have confirmed their attendance in the formal kick-off of the petroleum contracting round this November 22.

Energy officials further tipped off that interested parties in the petroleum service areas to be offered comprise of local as well as cash-rich and wellexperienced global players.

Under the tutelage of the PCECP, the DOE will be offering 14 pre-determined oil and gas blocks to interested parties. The other facet of the Duterte administration-designed petroleum contracting is the year-round nomination of the preferred service areas of the investors.

The pre-determined areas comprise of 14 service areas along six basins in various parts of the country. Altogether, they straddle 73,576.66 square kilometers of both shallow and deep-water drilling prospects in East Palawan, Cagayan, West Luzon, Sulu Sea, Cotabato and Agusan-Davao basins.

At its international roadshows, the energy department has initially stirred up the interest of several big-ticket investors – those that have deep pockets and with extensive investment experiences in global oil and gas development domains.

The true test of their interest, however, will only come at a time when they finally join the bidding for the PCECP areas or when they start submitting proposals on their hand-picked blocks.

For the pre-determined areas, the DOE explained that investment-offer will include a data package with an applicable application fee of non-refundable 1200,000. The application period is for 180 days.

In the nominated areas, investorapplicants can submit their preferred petroleum block to the DOE; and the nominating party shall be undertaking the publication of such at its own expense. The application is also at 1200,000, but it will be subject to a 60-day challenge period – wherein the challenger will be posting a fee of 11.0 million.

On evaluation of the offers, the criteria set forth by the Centralized Review and Evaluation Committee (C-REC) of the DOE shall be on these ratings: 40percent for the work program submitted; 20 percent on technical qualifications and 40 percent on financial qualifications. Legal qualifications shall be rated either “pass or fail” depending on the completeness and validity of required legal documents.

In terms of incentives, it will be a 60:40 royalty sharing arrangement in favor of the Philippine government and in keeping with the provisions of President Decree 87 or the Philippine Oil and Gas Law.