DOE sets offering of some areas near disputed West Philippine Sea for petroleum exploration 

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File Photo: West Philippine Sea

THE Department of Energy (DOE) said on Wednesday that some areas near the disputed West Philippine Sea (WPS) will be offered to investors for petroleum exploration activities.

“We may include areas in West Philippines Sea, Sulu Sea and around Palawan province,” agency’s Energy Resource Development Bureau Director Ismael U. Ocampo said during a news briefing after a DOE-led conference, entitled “E-Power Mo”.

The DOE has yet to determine the exact locations that will be included in the sixth Philippine Energy Contracting Round (PECR) for petroleum in December.

PECR is a transparent mechanism that allows the government to develop and utilize indigenous petroleum resources under a service contract regime, through partnerships with qualified local and international exploration companies.

The agency is pushing for the next PECR, despite a moratorium on all exploration and drilling works in Service Contracts (SC) 72 and SC 75 in December 2014 and 2015, respectively, amid maritime tension with China.

SC 72 is an oil and gas exploration permit covering the Sampaguita natural-gas prospect in the Reed Bank, to the west of Palawan. SC 75 is somewhere northwest of Palawan. Developments in those areas were put on hold over the territorial dispute, despite the ruling of the Permanent Court of Arbitration in favor of the Philippines.

The DOE, however, is aware that it needs to consult with the Department of Foreign Affairs (DFA) on this. “We need clearance from the DFA,” Energy Undersecretary Felix B. William Fuentebella said. “We defer this to the DFA.”

Ocampo said the DOE will discuss this with the DFA “within the month”.

If and when, the agency is successful in persuading the DFA in lifting the moratorium, Ocampo said, “We can already finalize the areas to be offered in blocks in the West Philippines Sea for the next PECR.”

The DOE is pursuing the launch of PECR 6 this year, even as it has yet to award the contracts under the PECR 5.

But officials are confident that the DOE will meet its target to award the pending petroleum contracts ahead of the PECR 6 launch. “The DOE can meet that target,” Fuentebella assured.

The DOE launched in May 2014 the fifth PECR for petroleum.

Under this bid, 11 petroleum blocks, with a total of more than 4.7 million hectares in West Luzon, Southeast Luzon, West Masbate/Iloilo, East Palawan and Recto Bank, were offered for exploration and development.

The areas for petroleum exploration include Area 1 in Southeast Luzon; 2 and 3 in Masbate-Iloilo; 4 and 5 in Northeast Palawan; 6 in Southeast Palawan; 7 in West Palawan; 8 to 11 in West Luzon.

Two of the blocks are close to the Spratly Islands, of which a portion is being claimed by the Philippine government, which are areas under territorial dispute with China.

Ratio Oil Exploration Ltd. of Israel submitted an offer for Area 4, which covers 416,000 hectares in waters of East Palawan.

Colossal Petroleum Corp., an affiliate of listed Coal Asia Holdings Inc., submitted bids for Area 5, a 576,000 hectares block in waters east of Palawan, and Area 7, a 468,000 hectares block within the disputed Reed Bank.

“We are already finalizing the contract. After which, we will submit it to Malacañang for signature, then we can award the contracts under PECR 5,” Ocampo said.

The DOE is eager to launch another petroleum contacting round to solicit interest from  investors.