Recto Bank deal prepped
Prospectors lining up
Department of Energy had improved the program for awarding petroleum service contracts covering the area to make the process flexible, accommodating and continuous, while maintaining transparency and fairness
In anticipation of a positive development in the upcoming meeting between President Rodrigo Duterte and Chinese President Xi Jinping by the end of this month, the Department of Energy (DoE) has laid the groundwork for the awarding of oil exploration deals in and around the disputed Recto Bank area.
The DoE said it had improved the program for awarding petroleum service contracts covering the area to make the process flexible, accommodating and continuous, while maintaining “transparency and fairness.”
DoE Secretary Alfonso G. Cusi’s initial directives upon assuming his post in 2016 was to enhance the 6th Philippine Energy Contracting Round (PECR) covering the controversial area.
An exploration ban on service contract 72 in the area considered rich with hydrocarbon deposits was under review when a collision between a Chinese
trawler and a Philippine fishing vessel happened that generated public furor, after the local fishermen which figured in the incident were abandoned by the bigger foreign vessel.
Guideline reviewed
The DoE, in a statement, said previous PECR underwent months of evaluation, preparations and consultations with stakeholders that resulted in the Philippine Conventional Energy Contracting Program (PCECP).
An existing “force majeure” ban had stopped exploration in the area despite several companies lining up in anticipation of the moratorium being lifted soon.
Acceptance of nominations for PCECP started on 7 February 2018, while the first batch of Pre-Determined Areas (PDA) was launched on 22 November 2018, the agency added.
Also in February, Service Contract 72 owner PXP Energy Corp., through Forum Energy Ltd., asked the DoE to lift the Recto Bank exploration ban.
PXP sent a letter of request seeking the lifting of the force majeure following the signing of a memorandum of understanding between the Philippines and China over cooperation in the West Philippine Sea (WPS).
The DoE said despite the current situation involving the contentious areas, investors remain eager and committed to explore the sea for petroleum resources.
In fact, noteworthy companies such as Shell Philippines Exploration B.V. and NWP Ventures, both UK-based companies, have nominated blocks for petroleum service contract applications within the disputed areas. Multiple companies, including Spanish firm Repsol, have shown interest in the WPS area.
Auspicious 5th
“Mr. Duterte’s fifth official visit to China is slated on 28 August until 2 September,” presidential spokesman Salvador Panelo said in a Palace briefing.
The President earlier said his trip to Beijing next week, his second for the year, was mainly to raise the country’s territorial row with China in the WPS, but his aides said cooperation agreements are expected with China’s accession to the drafting of a binding Code of Conduct among nations with conflicting claims.
“I have about two more years, plus months left (in office). It’s about time that we start talking,” said the Chief Executive earlier this month after baring his plans to meet Xi.
Six requests filed
To date, the DoE said it has received a total of six requests for area clearances from several companies for the Northwest Palawan-Recto Bank area.
From these requests, and upon confirmation by the DoE, interested companies may submit their letter of intent for the proposed area for nomination.
Thereafter, DoE said it will notify proponents to publish their nomination, which will be subject to challenge within 60 days from publication.
The required documents for legal, technical and financial evaluation are required after the lapse of the 60-day period and if the submission/application is compliant with the existing laws and guidelines. DoE then will recommend to President Rodrigo Duterte the execution of a service contract.
Even before the Department accepted nominations, many companies that have been meeting with the DoE had expressed their interest towards the Northwest Palawan and Recto Bank areas, with some firms already having nominated various areas in the disputed zones.
Players queue up
Many other interested parties are awaiting the government’s policy direction in the WPS and have expressed their desire to explore the area should the current moratorium due to force majeure be lifted.
Other areas of interest include the Sulu Sea, Quezon Province, Ragay Gulf and Mindoro.
Moreover, DoE said the opening of applications held this week affirms the continued interest of investors in the upstream petroleum industry.
The DoE added it is currently evaluating applications for four predetermined areas and three nominated areas coming from six companies or joint ventures, namely Ratio Petroleum Ltd., Philodrill Corporation and PXP Energy Corporation (JV), Sulu Sea Energy Resources Development Corporation, Esmaulana Global Ventures Company Inc., Troika Giant Power Corporation, and Superior (SG) Shipyards Corporation.
In February, Service Contract 72 owner PXP Energy Corp. through Forum Energy Ltd., asked the DoE to lift the Recto Bank exploration ban.
Duterte’s fifth official visit to China is slated on 28 August until 2 September.