Spratlys issue won't derail energy bidding

MANILA, Philippines -  The Department of Energy (DOE) has expressed confidence that the current issue on the Spratlys Islands will not affect the country’s biggest contracting round on oil and gas exploration.

Energy Undersecretary Jose Layug Jr. said the DOE, which is holding an international roadshow for the Philippine Energy Contracting Round (PECR) 4, is assuring prospective investors that all the areas covered under the latest bidding round are well within Philippine waters.

“We need to clarify that the 15 blocks we are offering are all within Philippine territories and there’s no issue about that,” he said.

Layug said this concern has been carefully reviewed by the Department of Foreign Affairs.

“We’re not offering any block in the Reed Bank, which is something we need to discuss with the DFA. What we’ve offered for PECR, the 15 blocks, are all within Philippine territory including the Reed Bank, which is now Recto Bank,” he said.

The energy official also pointed out that the prospective investors had not raised any concern on this matter during the roadshow.  “There’s none of them, because they know all the areas we are offering are located within Philippine territory. And nobody is questioning that,” he said.

Layug said most of the investors are eyeing areas near Northwest Palawan, specifically Areas 3,4 and 5 where the presence of oil and gas has already been proven. The $4.5-billion Malampaya deep water gas-to-power project is located in the area.

Under PECR 4, 15 new oil and gas exploration areas with a total size of more than 10 million hectares in Northwest Palawan, East Palawan and Sulu Sea basins would be offered to investors.

Among these areas are: Area 1 (544,000 hectares) in Cagayan; Area 2 (676,000) in Central Luzon; Area 3 (600,000) in Northwest Palawan; Area 4 (616,000) Northwest Palawan; Area 5 (424,000) Northwest Palawan; Area 6 (840,000) in Mindoro Cuyo; Area 7 (844,000) in Mindoro Cuyo; Area 8 (840,000) in East Palawan; Area 9 (840,000) in East Palawan; Area 10 (640,000) in East Palawan; Area 11 (600,000) in Cotabato; Area 12 (456,000) in Cotabato; Area 13 (648,000) in East Palawan; Area 14 (983,900) in East Palawan and Area 15 (482,000) in Sulu Sea.

Over the past decade, the country’s first gas find, the Malampaya field located in Northwest Palawan , produced a total of 970 billion cubic feet of gas, 43.9 million barrels of condensate and 1.9 million barrels of oil.