RP eyes Brunei as alternative supplier of oil

State-owned Philippine National Oil Co. (PNOC) is looking at the possibility of tapping Brunei Darrusalam as alternative source of oil in case of supply shortage brought about by the conflict between the US and Iraq.

"We had talks with our counterpart in Brunei (Brunei National Oil Co.)," PNOC president Thelmo Y. Cunanan said, in an interview.

But Cunanan said there are still no formal discussions with the Brunei government. "All the talks are exploratory. We had previous discussions. We will call them again to firm up a possible agreement," he added.

He said they expect to complete the negotiations for a potential supply agreement with other countries, including Brunei, before the year ends.

Early this week, PNOC had convinced Pertamina, the largest state-owned oil conglomerate in Indonesia, to sign a commercial supply agreement that would allow the Philippines to get oil from Indonesia in case of supply crunch.

Cunanan, however, declined to give the details of the Pertamina supply agreement. "We do not want to put figures yet. But I guess they are willing to supply more than our requirement per day (which is 350,000 barrels of oil)," he said.

Energy Secretary Vincent S. Perez said Indonesia is likely to provide at least 600,000 barrels of oil.

According to Cunanan, the government is ready with funds in case it is necessary to get more supply from other countries. "The government has the budget for this. It should be a commercial arrangement," he said.

He said this could be the first time that Indonesia will enter into a supply agreement with the Philippines, although it has been using one of the refining plants in Bataan to process its petroleum products.

"I understand, Indonesia has no capability to process it (oil resources) so they bring the oil to Bataan to process it," Cunanan said. He is not certain which refining facility in Bataan is being tapped by Indonesia and where the oil-rich country sells its refined products.

Aside from Indonesia and Brunei, the Philippine government is also looking at the possibility of signing bilateral oil supply agreements with Russia and other Middle Eastern country.

By the end of this month, a high-level mission will be going to Russia. The schedule for the Middle East trip, on the other hand, has yet to be firmed up.