Reporter

THE Department of Energy (DOE) said Wednesday it has yet to issue an approval for the conversion of Forum Energy Philippines Corp.’s (Forum Energy) geophysical survey and exploration contract (GSEC) 101 over Northwest Palawan to a full service contract. 

 In a statement, Energy Secretary Angelo  Reyes pointed out that once this venture has actually been given the go-signal, the DOE will make sure  this information is disseminated.  It is in the interest of all that this be known to everyone concerned.

 Reyes said that GSECs are given out to entities with working capital of $1 million as an operator and $500,000 as member of a consortium. 

Reyes added that those who embark on the said undertaking should have an adequate experienced and qualified team of petroleum explorationists to carry out the exploration program. 

 Reyes also pointed out that they should also have a work program acceptable to the DOE. 

Jose Raymund Apostol, president of Forum Energy Philippines Corp., earlier said  the government stands to lose control over the proceeds and development of the oil and gas prospects along the Reed Bank should it award the contract to explore and develop the said block along with other tripartite partners China and Vietnam.

 “The government will be left with only a third of what it could earn from the proceeds of developing and extracting oil from the Reed Bank should our  geophysical survey and exploration contract  be not converted into a service contract,” Apostol said.

 Earlier reports noted that there is a looming conflict in converting the GSEC 101 of Forum Energy on the Sampaguita oil and gas discovery in Reed Bank basin, which is within the “conflict area” of the South China Sea and covered by oil and gas explorations currently being undertaken by the Philippine National Oil Co., China National Offshore Oil Corp., and PetroVietnam.

 The Forum Energy official said his company is financially and technically capable of completing the work program his company had envisioned for the Reed Bank in view of reports quoting Energy Undersecretary Guillermo Balce as saying that the company has yet to document its financial capability.

 Apostol added that his company had already submitted as early as August last year the necessary documents that show not just its financial capability, but even its technical capability.

“The issue of financial and technical capability is being raised when a company is applying for a contract or prior to being awarded a contract with the Philippine government. Once a registered contractor for the government, the next thing a company is required to do is to perform and deliver the commitments made in a company’s contract,” said Apostol.

Based on Forum Energy’s study, according to Apostol, the project will entail them $100 million to set up several drilling wells and around $15 million to $20 million to commission drilling rigs.

Apostol said that Forum Energy, with its parent company publicly listed at the London Stock Exchange, has already raised $20 million from investors.

“While DOE could be saying all over the press that we need to show our financial capability, apart from the internally generated funds, we also plan to tap financial institutions,” he said. 

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DOE has yet to convert Forum Energy’s GSEC 101 into service contract

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