Oil exploration bid process kicked off in ‘conflict areas’

Invoking rightful ownership at the West Philippine Sea, the Department of Energy (DOE) indicated that it has already started processing applications and tenders for prospective exploration and development of oil and gas resources even for blocks straddling “conflict areas” in the basin.

Energy Secretary Alfonso G. Cusi admitted that initial resistance has been posed by China, because of its nine-dash lime claims at the disputed territory, but he said the Philippine government insists “that is ours,” hence, it has the legal authority over the blocks being offered under the petroleum contracting round.

The energy chief qualified though that the two countries continue to dialogue on how they can sort out an acceptable legal framework toward “joint exploration activities” in these diplomatically strained territories.

“For us at DOE, we want to proceed because the country needs it for energy security. The department is pushing it,” he said, while emphasizing that they continue to entice investors to look at the blocks on offer.

Once the Covid-linked modiked enhanced community quarantine (MECQ) is relaxed, Cusi noted that the department will open bids for four nominated oil and gas blocks that had been previously set for 60-day challenge period.

The submission deadline for offers to Areas 5, 6, 7 and 8 have been scheduled May 5 and 8 this year, but given the extension of the lockdowns, Cusi stressed they will need to wait for the time when relevant parties could already physically attend a bid opening process at the department.

“We will open (the bids) as soon as the quarantine is lifted, or when movement restrictions are eased, and people can start working and the companies can attend,” he said.

The energy official admitted that of the three blocks (Areas 6, 7 and 8) in the West Philippine Sea, there are service areas within the disputed domain, but he has not speciked which blocks are these. Area 5 is in Mindoro-Cuyo basin.

He specified that these are “nominated blocks” by interested parties, but he has not disclosed the identities of the investors at this point.

Nomination of a preferred block by an investor is one mode of investing in the country’s oil and gas sector, as underpinned by the Philippine Conventional Energy Contracting Program (PCECP) designed by the Duterte administration. The other is scheduled bidding for pre-determined areas (PDAs), which the DOE had undertaken last year.

SM Development Corporation (SMDC), the residential arm of SM Prime Holdings, Inc., posted a 23 percent increase in revenue to ₱11.4 billion in the krst quarter of 2020 from ₱9.3 billion in the same period last year.

In a disclosure to the Philippine Stock Exchange, the krm said reservation sales in the krst quarter amounted to ₱24.8 billion.

SMDC accounts for 44 percent of SM Prime’s consolidated revenues. In a statement, SM Prime reported that with 16,000 housing units available, equivalent to 12 months of sale, it has enough supply to cushion the effect of construction delays in the residential projects due to the ECQ.

SM Prime recorded a consolidated net income of ₱8.3 billion in the krst quarter of 2020, down by 5 percent compared to ₱8.8 billion in the krst quarter of 2019.

The company’s consolidated revenue from January to March is ₱25.8 billion, 3 percent lower than ₱26.5 billion of the same period last year.

“The residential segment has shown strong growth in the krst three months, abating the effect of revenue losses in the malls segment. The balance between our recurring and developmental income streams sustains our healthy knancial position during this pandemic,” said SM Prime President Jeffrey C. Lim.

SM Prime’s strategic development of integrated properties proved to be resilient as this allowed the Company to be able to cope with the crisis.

With low gearing and strong residential market, the Company is able to maintain strong knancial position that enables it to weather the adverse economic effects of COVID-19.

“We believe that in a crisis like this, flight to quality will be the driver for consumers and buyers, and SM has the solution and right product,” said SM Prime Chairman Henry T. Sy Jr.