DOE to issue guidelines for bidding of Camago-Malampaya oil leg
The Department of Energy (DOE) is expected to release within this quarter the guidelines for the bidding of the Camago-Malampaya oil leg (CMOL), Energy Secretary Angelo Reyes said over the weekend
Reyes said this timetable on the release of the guidelines is consistent with the projected flow of first oil in CMOL by 2010.
The Malampaya oil rim should be developed at the soonest time, before gas production will have brought pressures to a level that will lower recovery of the oil.
“We will come up with the guidelines for the accelerated bidding of the oil leg in the next two to three months. PNOC-EC is finalizing the guidelines and we’re looking at bidding it out in the near future,” Reyes said, adding that they would be pushing for the planned bidding for the oil exploration project.
“Initially, we were looking at Shell (Shell Philippines Exploration B.V.) doing it themselves but they didn’t want to. So we will bid it out,” he said.
The Energy chief admitted that they need to upgrade the guidelines based on the developments in the oil exploration industry.
“It will be stringent to discourage fly-by night investors but not too stringent to discourage legitimate investors,” Reyes said.
He also underscored the need to fasttrack the release of the guidelines.
“We want the first oil to flow by 2010. We’re looking at the oil window from Malampaya because if that window is not taken, if we will not take it as opportunity, it will have added cost,” Reyes said.
State-owned PNOC-Exploration Corp. (PNOC-EC), mandated to take the lead in the CMOL bidding under Executive Order 556, has been waiting for a go-signal from the DOE on what to do with the oil rim.
Earlier, the PNOC-EC, a subsidiary of sate-run Philippine National Oil Co. (PNOC), presented three bidding schemes for the oil leg.
The first option is to allow the original service contract owners of the CMOL, namely Shell Philippines Exploration B.V., Chevron-Texaco and PNOC-EC to develop the oil rim.
The Malampaya consortium decided to relinquish its rights over the CMOL project as they consider it to be “sub-commercial.”
Another option is to invite a third party to develop it and the last option is for PNOC-EC to do it by itself.
With estimated reserves of 40 million barrels of oil, the development of CMOL is expected to cost about $1 billion.
A number of oil exploration firms have signified interest to develop the Malampaya oil rim, including the Ability Group of Norway, Argo/Mitra, Burgundy Global Exploration Corp., M3nergy of Malaysia, Premier Oil of the
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