48 firms vie for new oil-gas areas
    The Department of Energy (DoE) has listed at least 48 local and international oil and gas exploration production companies that have shown initial interest in the new blocks being offered for discoveries and development.
    It can be culled that the government earlier opened around 46 new oil and gas exploration blocks that if proven could yield reserves between 1.5 to 2.0 trillion cubic feet.
    The energy department noted the potential reserve of 2.0 TCF is seen to translate to 200 to 250 million barrels of oil equivalent.
    The exploration blocks would be bidded out soon and this would be through the newly-devised First Petroleum Public Contracting Round.
    The prospects cover 222,914 square kilometers in shallow to ultra-deep waters located near proven petroleum structure in northwest Palawan and in vast frontier basins in southeast Asia and east Palawan, Sulu Sea and Reed Bank.
    By using selected data displayed in the physical data room of the DOE, applicants have seven months starting August 2003 to evaluate the petroleum potential of the 46 blocks.
    Data may also be accessed through the virtual data room starting September 1, 2003. This virtual data room will be placed in a secured location in Houston, London and Stavanger and Manila.
    Energy undersecretary Eduardo V. Manalac noted that the DoE will select applicants that can demonstrate a good understanding of the possible resource potential of the 46 areas and will carry out a work program that will efficiently map and test this potential.
    “Applicants must have experience from exploration and field development in similar areas and must have the necessary risk capital and financial capability to explore and develop,” he explained.
    Interested companies are given until 5 p.m. on Mach 2, 2004 to submit their applications. Winning bidders shall be announced at the awarding ceremonies on May 2004.
    Under the fiscal terms for PCR-1, a contractor recover its exploration and development costs from 70 percent of gross proceeds and get a maximum of 40 percent net proceeds while the government share is equivalent to 60 percent.
    Likewise, the contractor shall be exempted from paying the national taxes except income tax; as this will be paid out of the government share.
    At the same time, the contractor can also tap a Filipino Participation Incentive Allowance (FPIA) of up to a maximum of 7.5 percent with a minimum of 15 percent participation of a local company.
    “The prospectivity of these areas in Palawan and Sulu Seas have long been underrated. But we at the DoE can now demonstrate thru the latest seismic technology that these 46 new blocks contain high-potential prospects that are analogous to proven hydrocarbon rich basins in the neighboring countries,” Ma?alac stressed.
    He noted the best proof of abundance of the country’s oil and gas reserves is the discovery of the Malampaya deep water gas-to-power project; which is now instrumental in powering a significant chunk of the country’s power industry.