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WITH
world oil prices softening, the government is reviewing
its options in the development of the Camago-Malampaya
Oil Leg (CMOL), Energy Secretary Raphael P.M. Lotilla
told reporters on Saturday.
“We
will decide whether we will still push through or not
with the development of the CMOL project within the
quarter,” Lotilla said. The CMOL pertains to that part
of the natural gas concession off Palawan from where oil
can also be extracted under very strict technical
conditions.
The
state-owned Philippine National Oil Co. last year was in
talks with Malaysian-based Mitra Energy Ltd. to do the
extraction, but the farm-in agreement was scuttled by
controversial Executive Order 556, requiring the PNOC to
go back to square one and hold a full bidding.
Energy
experts said the order set back the efforts to extract
the oil by at least six months, sparking questions of
whether it was still feasible—or in the first place,
even technically possible—to do the extraction, which
some officials had hoped would reduce the country’s oil
import bill. Scientists has explained that there is a
strict window within which the oil can be extracted
without putting in jeopardy the main concession, the
Malampaya deepwater gas to power project.
The
energy chief said Saturday that the impact of the
continuous downtrend in world oil prices is “one of the
things the government will have to look at in
determining whether developing the CMOL will still be
economically viable or unviable.”
Besides
softening world oil prices, Lotilla said issues of
insurance of the Malampaya deepwater gas-to-power
project also delayed the CMOL.
“So
these are issues we are all looking at, and these all
require a lot of numbers crunching,” Lotilla said.
Lotilla
earlier admitted that the government is aware of the
fact that any delay in coming up with the final terms of
reference (TOR) for the development of the CMOL could
bear lower-than-expected results
PNOC
estimates that every year of delay could reduce the
“ultimate recovery” level of oil extracted by anywhere
from seven to eight million barrels a year.
Lotilla
said the government is fast-tracking the formulation of
the new TOR for the development of the CMOL project with
respect to Executive Order 556 the President issued.
Lotilla
declined to comment on whether Mitra Energy could still
join the bidding for the project. |
