Seven Companies Bid in Philippines Petroleum Contracting Round
Philippines August 19 announced bids from seven companies in the latest petroleum contracting round. Of the seven tender-submissions, Israeli Ratio Petroleum was the only foreign investor. The rest are Filipino companies that would still need the deep pockets and technical expertise of foreign partners to carry out viable ventures in the country’s upstream petroleum sector.
As announced by the department of energy, only four of the 14 pre-determined areas (PDAs) cornered investors: Ratio Petroleum for Area 3 in East Palawan basin; Sulu Sea Energy Resources and Development Corporation and Esmaulana Global Venture Company Inc. for Area 6 which is in Sulu Sea; the joint venture of Philodrill Corporation and PXP Energy Corporation for Area 7 (also in Sulu Sea); and Esmaulana Global Venture Company Inc. for Area 10 in the Agusan-Davao basin.
Three nominated petroleum blocks were also placed on a 60-day challenge period, but no investors came forward to compete with the original bidders. These were for the nominated areas of Sulu Sea Energy Resources and Development Corp for the Sulu Sea basin; Troika Giant Power Corporation for East Palawan; and Superior (SG) Shipyards Inc. for Ragay Gulf in the Bicol region.
It has been manifest that even the well-entrenched players in the Philippine upstream oil and gas sector – like Shell, Chevron, Total and Nido Petroleum, have not joined this fresh round of auction.
For the 10 pre-determined blocks that failed to secure investor-offers, Energy Assistant Secretary Leonido Pulido III who chaired the bid opening proceedings, disclosed that these will be recast as “nominated areas” so bids could also be accepted year-round. A department circular to be signed by energy secretary Alfonso G. Cusi will be issued separately on this decision for the specified blocks.
“That’s the reason why the petroleum contracting regime was changed to give it more flexibility because we were aware that we would be facing this challenge. We were well aware early on that we will have difficulty in getting more investors to come in if we just confined processes to scheduled biddings. So the nominated areas have been added anchor to it, otherwise, we would only had four out of the seven offers,” he said.
Pulido admitted that the outcome of the Philippine Conventional Energy Contracting Program (PCECP) “could have been better” had not been for the many hurdles that the country still confronts in wooing investors into the sector – including the protracted territorial dispute at the South China Sea/West Philippine Sea.
“We do have existing territorial disputes – so in the discussions that we’ve had around the world, we do recognize that the Philippines is not exactly that marketable -- so there is difficulty, there is a challenge there,” he stressed.
The department also realises chronic “weakness” in data gathering and presentation that could have helped whet investors’ appetite in the offered areas. To address this, Pulido disclosed that the DOE will be asking Congress for additional budget specifically for the purpose of establishing systematic data gathering and storage for the country’s petroleum blocks.
“The department is studying ways on how to improve data, it is not just the gathering of data, or the storage of data but also the interpretation of data. So we will secure funding from Congress in order to fund efforts to get more data, store more data and interpret data,” he said.
The energy official further said the government would also need to carry out more aggressive marketing of the country’s petroleum contracting through international roadshows. And for this, the DOE is scheduling its next overseas promotions activity in Argentina within this month.