Phl, Israel sign Palawan oil exploration deal

Malacañang yesterday expressed hope the oil exploration deal between the Philippines and an Israeli firm would lessen Manila’s dependence on imports and its vulnerability to price shocks in the global market.

On Wednesday, President Duterte and Ratio Petroleum Ltd. president and chief executive officer Itay Raphael Tabibzada signed an oil exploration agreement covering East Palawan Basin or Area 4 of the fifth Philippine Energy Contracting Round.

The signing was ceremonial as the deal had already been inked during Duterte’s visit to Israel last month.

Presidential spokesman Salvador Panelo said Duterte was the one who signed the agreement on behalf of the Philippine government because such exploration contract requires the President’s signature.

The petroleum service contract will allow Ratio Petroleum to explore

416,000 hectares across East Palawan Basin for potential oil and gas resources. The deal is expected to cost at least $34.35 million, including data gathering and drilling activities over the initial seven-year contract period.

Panelo said the signing of the agreement bodes well for the economic relations between the two countries and the Philippines’ petroleum industry.

“If you remember, the President made statements that (the country) needs to attain energy security and sustainability at the soonest possible time. The problem is we do not have oil so we are experiencing difficulties,” Panelo said.

“We’ve been dependent on oil-producing countries for our oil. So we need to boost the exploration of our own resources,” he added.

Energy Secretary Alfonso Cusi said the awarding of the petroleum service contract to Ratio Petroleum is “a step in the right direction.”

“The President has been very clear – our country needs to attain energy security and sustainability at the soonest possible time. We are currently experiencing how our dependence on importation has left us at the mercy of price movements in the global oil markets,” Cusi said in a statement.

The deal is the first petroleum service contract signed under the Duterte administration. The last service contract awarded was with PXP Energy Corp. in 2013. PXP Energy is the operator of Petroleum Service Contract No. 75 in North Western Palawan under the fourth Philippine Energy Contracting Round.

Established in 1992, Ratio Petroleum has a number of large-scale operations at the Levant Basin in the Eastern Mediterranean Sea, off the coast of Israel, as well as offshore operations in Malta and Guyana.

The Philippines has been importing 94 percent of its oil requirements, with the total import bill jumping to $9.89 billion in 2017, a 31.2 percent increase from the $7.54 billion import bill in 2016.

President Duterte had earlier pointed to increasing oil prices as the main culprit for rising inflation, which peaked at 6.7 percent in September, its highest in nine years.

The Department of Energy (DOE) is busy promoting investments in 14 pre-determined areas (PDAs) for potential petroleum exploration and development activities locally and abroad.

The PDAs include one area in the Cagayan Basin, three in Eastern Palawan, three in Sulu, two in Agusan-Davao, one in Cotabato and four in Western Luzon.

Duterte also met with officials from Japan and United Arab Emirates yesterday.

Japan’s Liberal Democratic Party Special Adviser for Foreign Affairs to the President Katsuyuki Kawai paid a courtesy call on Duterte to discuss the relationship between Manila and Tokyo.

“It was a courtesy call, an exchange of pleasantries and usual commitments on the mutual benefit that the countries will derive from their relationships,” Panelo said.

Japanese paper Daily Manila Shimbun reported that Kawai had relayed to Duterte Japan’s willingness to provide additional help for the rehabilitation of war-torn Marawi City.

The paper said Japan Prime Minister Shinzo Abe, through Kawai, also signified his interest to meet with Duterte on the sidelines of the AsiaPacific Economic Cooperation leaders’ meet in Papua New Guinea or the Association of Southeast Asian Nations Leaders’ Summit in Singapore.