DOE concludes RP’s first petroleum contracting round

The Department of Energy (DOE) successfully concluded yesterday the country’s first Philippine Petroleum Contracting Round (PCR-1) with at least 16 companies expressing interest in the bidding.

The DOE, however, did not disclose the actual number of bidders for the contracting round.

"It is very heartening to see that there remains keen interest among the oil exploration companies in our country’s petroleum exploration. The government stands committed to developing our own energy resources to increase our energy self-sufficiency in the midst of soaring oil prices in the world market," Energy Secretary Vincent S. Perez said.

The DOE opened in August last year the bidding for 46 new exploration blocks located near the Malampaya gas field offshore Palawan and other oil and gas discoveries and producing fields in Southwest and East Palawan, Sulu Sea and Reed Bank.

But the DOE said the disclosure of the names and number of companies that actually applied for application contracts, however, is not allowed under the very strict bidding guidelines.

Following the closing of the bids, the DOE said it will commence with the technical, legal and financial evaluation of the documents with the awarding of the contracts possibly by May this year.

After PCR-I, the DOE also plans to conduct a geothermal bid round at the onset of the second quarter to promote the development of geothermal power development in the country.

Energy Undersecretary Eduardo Mañalac said the bidding for the geothermal fields is scheduled after the PCR-I or by mid-March this year.

"We have identified at least 10 possible geothermal development areas in Luzon, Visayas and Mindanao. We also preparing a package for prospective investors," Mañalac said.

According to Mañalac, they are still studying the actual procedures and terms for the bidding of the geothermal fields. But he said they may use the PCR-I as basis in developing such scheme.

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.

The DOE is optimistic that it could generate greater response to the new bidding round since the Philippines is the world’s second largest producer of geothermal energy next only to the US.