The two service contracts were awarded as part of the Philippine Energy Contracting Round 2005 (PECR 2005) launched in August 2005.
The contract area for SC No. 61 covers 13,560 square kilometers located in a deep-water area offshore Northeast Palawan, adjacent to the prospective Service Contract 60 area of Shell Philippines. The other contract, SC 62 covers 13,020 square kilometers located offshore East Balabac in Southeast Sulu Sea near the Malaysian border.
"We are very pleased that the contract negotiations for area 2 and area 3 under PECR have been completed and that BEGC can now proceed with the work program. It is our hope that they will be able to find new resources of commercial quantity in both areas to push forward our drive for energy independence in the midst of surging oil prices," Energy Secretary Raphael P.M. Lotilla said.
For SC 61, Lotilla said BEGC has committed some $44.9 million or about P2.33 billion investments for the seven-year exploration period which will be done in six sub-phases including the conduct of comprehensive geological and geophysical studies and the drilling of four exploration wells.
Some $43.85 million or about P2.28 billion has been committed for SC 62 for seven-year exploration period which will also be done in six sub-phases including the conduct of comprehensive geological and geophysical studies and the drilling of four exploration wells.
BEGC is a Filipino-owned corporation and a member of the Burgundy Group of Companies which has vast experience in bringing foreign investments into the Philippines. In 1992, Burgundy brought into the Philippines the $32-billion Jupiter Funds, an asset management company based in London and Bermuda.
Following the result of PECR 2, four proposals have been selected for petroleum service contracts negotiations in four areas in offshore Palawan and Sulu Sea basins.
Lotilla said negotiations are still on going for the two remaining service contracts for Area 1 and Area 4. It is anticipated that these two remaining contracts will be awarded next month.