DOE enforces 2 modified schemes of petrol contracting

The Department of Energy (DOE) will be enforcing two modes of contracting under its amended policy on award of petroleum service contracts – to be institutionalized via the Philippine Conventional Energy Contracting Program (PCECP).

As fleshed out by Energy Senior Undersecretary Jesus Cristino P. Posadas, interested investors can apply for service contracts on unsolicited basis, either through: One, the pre-determined areas offered by the DOE; or two, taking the option to nominate and/or apply for areas and submit such to the DOE for approval.

The department noted that the country has at least 16 sedimentary basins straddling roughly 709,000 square kilometers of service areas for prospective new oil and gas finds.

For a probable yield of 4.7 billion fuel oil equivalent, these areas include the Ilocos Shelf, Cagayan Basin, Central Luzon Basin, Bicol Shelf, Southeast Luzon Basin, Mindoro-Cuyo Basin, West Masbate-Iloilo Basin, Visayan Basin, Agusan-Davao Basin, Cotabato Basin, Sulu Sea Basin, East Palawan Basin, Southwest Palawan Basin, Reed Bank Basin, Northwest Palawan Basin and West Luzon Trough.

Posadas indicated that the review process for the contract applications shall “adhere to the same evaluation criteria of the PECR (Philippine Energy Contracting Round).”

He similarly emphasized that a Review and Evaluation Committee (REC) be constituted “to oversee matters from awarding to termination of petroleum service contracts.”

The revised petroleum contracting, according to the energy official, gives “opportunity for interested parties/investors to participate all-year round,” compared to the previous scheme wherein interested parties can only submit offers upon the formal solicitation of tenders by the DOE.

The flexible timelines, he said, “allow interested parties’ participation in the program at their own pace or convenience, and as current financial capacities permit.”

Posadas further opined that they are expecting “quality proposals and effective work programs” getting submitted, because investors could have “adequate time for them to allow careful examination of technical data and preparation of application requisites.”

The DOE, nevertheless, cannot categorically state yet how it can get out of the more tricky issues of “the diplomatic drift” as well as the tax issues that have been impeding investment flows in the upstream petroleum sector.

Coming in tandem with this remodeled award of upstream petroleum contracts would be “shorter period of processing time,” Posadas said, adding that this will entail “30 working days from the opening of the application to the awarding.”

It is worth noting that under the last PECR, the award of the winning offers are still pending given the final review by of relevant agencies. Five firms have winning offers in the last bidding round.