Area 1 to Area 15 Philippines Oil & Gas Exploration Areas
The Department of Energy (DOE) will bid out 15 new oil and gas exploration areas mostly near the East Sea (Formerly called South China Sea) and Sulu Sea, under the Philippine Energy Contracting Round (PECR) 4 next month.
The DOE will officially launch PECR 4 on June 30.
Industry sources said there are already a number of interested parties that have expressed interest to join the bidding round.
“There are a lot of oil exploration companies willing to join the bidding. We will only know who will really bid on June 30,” a source said.
Among the areas that would offer are:
Area 1 (544,000 hectares) in Cagayan;
Area 2 (676,000 has) in Central Luzon;
Area 3 (600,000 has) in Northwest Palawan;
Area 4 (616,000 has) Northwest Palawan;
Area 5 (424,000 has) Northwest Palawan;
Area 6 (840,000 has) in Mindoro Cuyo;
Area 7 (844,000 has) in Mindoro Cuyo;
Area 8 (840,000 has) in East Palawan;
Area 9 (840,000 has) in East Palawan;
Area 10 (640,000 has) in East Palawan;
Area 11 (600,000 has) in Cotabato;
Area 12 (456,000 has) in Cotabato;
Area 13 (648,000 has) in East Palawan;
Area 14 (983,900 has) in East Palawan and
Area 15 (482,000 has) in Sulu Sea.
Under the fiscal terms, there will be a Filipino Participation Incentive Allowance (FPIA) or minimum 1.5 percent and maximum 7.5 percent of gross proceeds for service contracts with at least 15 percent participation by domestic companies.
The government has been very aggressive in finding new oil reserves in Philippine waters.
From 2001 to 2010, 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.
Another three out of the four deepwater wells drilled by ExxonMobil were declared gas discoveries.
In 2001, the Malampaya consortium composed of Shell, Chevron and PNOC-EC invested $2.1 billion in the Philippines, which has already been recovered by year 2005. Annual gross revenue generated from the Malampaya project is estimated to be about $3.1 billion.
The DOE, in preparation for the PECR 4, said with the current political turmoil in the Middle East and North Africa and the continued increase in the price of petroleum, now is the most promising time to invest in the Philippines, which offers one of the most competitive fiscal regime in the Asia Pacific region.
“The Philippine petroleum service contract system is well established, making it more appealing to some of the industry’s major players such as Chevron, Shell, ExxonMobil and BHP Billiton.”
The areas will have a minimum application fee of $2,500. Application period is 90 days upon PECR 4 launching. Evaluation period will last 45 days and the service contracts will be awarded to the new operator 80 days after application.
