DoE may nix Colossal Petroleum’s oil exploration bid

THE Department of Energy (DoE) may reject Colossal Petroleum Corp.’s proposal to explore oil and gas resources in two areas in Palawan province under the 5th Philippine Energy Contracting Round (PECR 5), its chief said on Monday.

At the sidelines of Samahang Plaridel’s Kapihan sa Manila Hotel event on Monday, Energy Secretary Alfonso Cusi said that if the oil firm would no longer pursue its exploration plans, “we have no choice but to terminate it, because we cannot leave it hanging.”

Energy Undersecretary Donato Marcos told reporters that the DoE would give Colossal Petroleum an ultimatum to either disclose its plans to explore the area or abide with whatever the Supreme Court decides on the Malampaya consortium’s petition to review the Commission on Audit’s order for it to pay the government P147 billion in income taxes.

The consortium is made up Shell Philippines Exploration B.V., which owns 45 percent of SC 38 and operates the Malampaya gas facility; Chevron Malampaya LLC, which holds 45 percent; and state-run Philippine National Oil Co.-Exploration Corp., which holds 10 percent.

This was an outcome of the department’s meeting with Colossal Petroleum, an affiliate of listed Coal Asia Holdings, Inc., about two weeks ago, he said.

According to the Energy chief, Colossal Petroleum is not willing to do what Israel’s Ratio Petroleum Ltd. did, which is accepting whatever that verdict would be.

This led to the signing of a petroleum service contract between President Rodrigo Duterte and Ratio President and Chief Executive Officer Itay Raphael Tabibzada last week.

“Angproblemasakanila, they are not in agreement to do what Ratio did ( The problem with them is that they are not in agreement with what Ratio did),” Cusi said.

Under the contract signed last week—the first of its kind signed under the Duterte administration—Ratio Petroleum is permitted to explore oil and gas resources in the 416,000-hectare Area 4 (East Palawan Basin).

This contract came after Colossal Petroleum had submitted bids to explore East Palawan’s Area 5, which measures 576,000 ha. and has the potential to yield 1,897.4 million barrels of oil (MMBO) and 2,846.6 billion cubic feet of gas (BCFG); and Area 7 in Reed Bank, which spans 468,000 ha. and has the potential to yield 165 MMBO and 3,846 BCFG.

Colossal Petroleum had qualified for exploring those areas under PECR 5, an old scheme of awarding service contracts for coal and petroleum exploration.