The Energy Department listed short-term targets, including the lifting of moratorium on West Philippine Sea exploration, to revive the country’s oil and gas sector which is now on a standstill amid low prices and industry challenges.
The department said in a budget presentation to Congress that these targets included assessing and reviewing reserves, lifting the moratorium on service contracts affected by the territorial dispute in the West Philippine Sea and monitoring and supervising work programs of contractors.
Service contracts under moratorium include Forum Energy Plc.’s SC 72, which covers a 8,800-square-kilometer area west off Palawan (Recto Bank) and is estimated to contain bigger reserves than the Malampaya gas project.
The department previously granted a force majeure to Forum Energy on SC 72 due to the territorial dispute even as the company already spent around P1 billion for pre-development activities.
Aside from SC 72, the department granted PXP Energy Corp. (formerly Philex Petroleum Corp.) a force majeure on SC 75 offshore northwest Palawan near SC 72 (Recto Bank) and SC 58.
Nido Petroleum Corp. of Australia and PNOC Exploration Corp. also sought to suspend their work program under SC 58 in northwest Palawan, while the dispute was being resolved.
SC 58 is a deep water acreage covering an area of 13,440 sq km west of SC 57 and SC 38 or the Malampaya gas field.
The government expects to find new oil and gas reserves in the face of the eventual depletion of the Malampaya gas reserves over the next decade.
Energy Secretary Alfonso Cusi said the agency would confer with the Foreign Affairs Department regarding the lifting of the moratorium as they wanted to ensure that oil and gas companies could conduct exploration and development safely.
The department said it would also conduct energy contracting rounds and offshore safety induction and energy training.
Cusi said the department was also looking at Swiss Challenge to replace the traditional energy contracting round.
“What makes it different is, before, you wait for DOE for the announcement that we’re going to open this area for exploration for contracting, so development is slow. Right now, some have started studies and they want to explore that area,” Cusi said.