14 foreign groups eye RP’s 1st petroleum contracting scheme

At least 14 international oil and gas exploration firms have expressed keen interest in the bidding for the country’s first Petroleum Contracting Round (PCR-I), a Department of Energy (DOE) official said.

Energy Undersecretary Eduardo Mañalac told reporters that these firms have bought data in preparation for the PCR-I.

"We hope that these companies will be encouraged to participate in the licensing bid round on March 2," Mañalac said.

Mañalac said most of the firms are based in the United States, Europe, Australia and Asia.

Among these companies include: BHP Billiton, TOTAL, Scott Oil of Norway, Norshsk Hydro, Malaysia’s Genting Oil, PetroVietnam, Chevron Texaco, Amerada Hess, Hunt Oil, Occidental Petroleum, Marathon Oil Corp., and Exxon Mobil.

Mañalac said the main concern of these companies, based on their preliminary talks with the government, is getting local partners.

"The common questions are about the Filipino participation, how that works. They have questions about the availability of local companies to partner with. I assured them that there are many local companies that have worked for many long years and are experts in specific areas of the licensing round, particularly Northwest Palawan," Mañalac said.

Under the fiscal terms for PCR-1, a contractor recovers 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 national taxes except income tax, which shall be paid out of the government share.

The contractor can also get a Filipino Participation Incentive Allowance (FPIA) of up to a maximum of 7.5 percent with a minimum of 15-percent Filipino participation.

Mañalac said he is optimistic that the number of companies that will participate in the bidding process will increase.

"We are continuing our efforts to encourage foreign investors to consider PCR-I since this will be a one-time bidding," he said.

In August 2003, the DOE launched the PCR-1, a new bidding scheme that gives excellent contractual and fiscal perks. Some 46 new exploration blocks that are located adjacent to oil discoveries and producing fields will be auctioned under this new bidding scheme which will start in March this year.