DOE to launch new energy contracting round this year

The Department of Energy (DOE) will launch another public contracting round (PCR) for oil, coal and geothermal exploration areas by the end of this year, a DOE official said.

Energy Undersecretary Guillermo Balce said since they expect to wrap up PCR 3 by the third quarter, they intend to commence with PCR 4 in the latter part of the year.

"We think we have to hurry up with PCR 3 to give way to PCR 4. Immediately after PCR 3, we will start with PCR 4 late this year," he said.

Balce, however, pointed out that the DOE has not yet identified the areas to be covered under PCR 4.

He noted that almost all the areas being offered at PCR 3 have been covered.

"In every block of PCR 3, there is already an interested party," the DOE official said.

Late last year, the DOE offered 10 more oil and gas exploration blocks under PCR 3 with an aim to raise more than $200 million worth of investments.

The DOE offered nine petroleum areas with a total area of 71,357.30 square kilometers in shallow to deep waters located within the prospective basins of East Palawan and Mindoro-Coyo, and in the promising basins of Cagayan, Central Luzon, Visayas and Agusan-Davao.

Meanwhile, 14 coal prospects with a combined estimated reserves of 421 million metric tons (MMT) and found in Quezon, Negros Occidental, Cebu, Surigao del Norte, Surigao del Sur, Agusan del Sur, Davao Oriental and Zamboanga Sibugay are also up for bidding in this contracting round. 

Geothermal energy equivalent to about 100 megawatts of power generation in the areas of Batangas, Biliran and Compostela Valley also await prospective investors in PCR 3. 

The energy official did not quantify how much will be raised from the soon-to-be-launched PCR 4. "We do not have an idea yet.  But we hope we could raise as much as we have in PCR 3," he said.

The DOE had ceased from issuing service contracts for energy resource exploration in the country after the launching of the PCR 3 last Dec. 22, 2006.

Under the DOE circular, "the DOE shall not accept any application or proposals for exploration, development and production service/operating contracts except during the competitive public contracting rounds," unlike the practice in previous years.

This provision is in keeping with DOE’s adoption of a transparent and competitive system for awarding service/operating contracts for the exploration, development and production of the country’s coal, geothermal and petroleum resources, effectively consolidating the two previous department circulars which governed the PCR 1 in 2004 and PCR 2 in 2005.

The circular also provides the option for the Philippine National Oil Co. (PNOC) to participate in the petroleum service contracts, with "a maximum of 10 percent equity participation in a proposed service contract involving one or more Filipino participants, or a maximum of 15 percent equity participation in a proposed service contract involving no Filipino participant."

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