PECR 5 to boost PHL’s oil, coal output by 2019–US-EIA report

The-Phillippines-offer-11-exploration-blocksAN ongoing auction on the exploration of potential coal and petroleum areas in the Philippines could increase the country’s oil production to 39,000 barrels per day (bbl/d) by 2019, the US Energy Information Administration (EIA) said in its latest report.

“In 2013 total oil production was 26,000 barrels per day while the country consumed 299,000 bbl/d. In May 2014 the government invited tenders for 11 oil and gas blocks in the Palawan Basin and nearby areas, including one in the South China Sea. This exploration bid round could push oil production up to 39,000 bbl/d by 2019,” the EIA said.

The Department of Energy (DOE) launched last year the Fifth Philippine Energy Contracting Round (PECR 5), in which 11 blocks covering a total area of 47,840 square kilometers are being offered to potential investors.

Most of the oil-and-gas exploration blocks are near the Philippines’s main island of Luzon, while most of the coal blocks are in southern Philippine provinces. Ten of the 11 oil and gas block on offer are offshore.

The blocks are mainly in frontier regions, and cover an average size of 4,350 sq km per block, with the largest covering 5,760 sq km in the East Palawan region.

The areas for petroleum exploration include Area 1 in Southeast Luzon; 2 and 3 in Masbate-Iloilo; 4 and 5 in Northeast Palawan; 6 in Southeast Palawan; 7 in West Palawan; and 8 to 11 in West Luzon.

Two of the blocks are close to the Spratly Islands, of which a portion is claimed by both  the Philippines and China. The EIA estimates that the South China Sea contains approximately 11 billion barrels of oil and 190 trillion cubic feet (tcf) of natural gas in proved and probable reserves.

“The area we are offering in the West Philippine Sea is near Palawan,” Energy Secretary Carlos Jerico L. Petilla said.

Area 7, according to the DOE, holds an estimated resource potential of 165 million barrels of oil and about 3.5 tcf of natural gas.

“As we live within international laws, we seek all diplomatic recourse to assert our claims to the areas in the West Philippine Sea,” Petilla said.

The Philippines imported roughly 270,000 bbl/d of crude oil and petroleum products in 2013, with 35 percent of their crude-oil imports coming from Saudi Arabia and Russia. Further, the country possesses the capacity to refine 290,000 bbl/d.

Shell Philippines and Otto Energy play significant roles in the upstream sector, while Petron Corp. operates the largest refinery in the country, supplying nearly 40 percent of the country’s oil needs. The Philippines exports nearly all the crude oil it produces.

“The Philippines is a net energy importer in spite of low consumption levels relative to its Southeast Asian neighbors. The country produces small volumes of oil, natural gas and coal. Geothermal, hydropower and other renewable sources constitute a significant share of electricity generation,” the EIA said.

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