DOE to auction coal blocks in Sept, oil contracts next Feb

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The Philippines is offering 11 areas for petroleum exploration and 15 areas for coal exploration under the 5th Philippine Energy Contracting Round (PECR-5), formally launched on Friday by the Department of Energy (DOE).

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At a presentation and briefing in Makati, the DOE said that the 11 areas for petroleum exploration are mostly located in Luzon while the 15 areas for coal exploration are largely concentrated in Mindanao.

If all concessions are awarded and all the projects proceed, the combined investment cost is estimated at P7.3 billion.

Energy Undersecretary Ramon Allan Oca said the bidding for coal exploration contracts will start on September 19 this year, while the bidding for petroleum contracts will be held on February 27, 2015.

Overall, the PECR-5 is expected to close before 2016.

“The investment for the entire 11 coal areas is $165 million. This is basically exploration and not production. The companies are given seven years to explore,” Energy Secretary Jericho Petilla told reporters.

Meanwhile, P10 million is required per coal exploration area. Combined, all the 15 coal contracts would require as much as P115 million worth of investment.

The areas offered for petroleum exploration include: Ragay, the central portion of South East Luzon Basin; Onshore Panay, the central portion of the West Masbate-Iloilo Basin; Offshore Panay, located within the Panay-Gulf Sub-basin in the southern flank of the West Masbate-Iloilo Basin; two areas in Northwest Palawan; Southwest Palawan; Recto Bank Basin; and four areas in West Luzon.

On the issue of Recto Bank, also known internationally as Reed Bank or Reed Tablemount, Petilla said that the disputed area remains in “Philippine territory, within the economic zone” unless a resolution is agreed upon stating otherwise.

Areas offered for coal exploration are in the four major coal producing regions, namely Surigao-Coal Region; Agusan-Davao Coal Region; Zamboanga Coal Region; and Cotabato-Saranggani Coal Region.

For the petroleum blocks, submission of applications will start on June 2, 2014 and will end on February 27, 2015, while for coal, the applicants may start submitting their bids from May 29, 2014 until September 19, 2014.

After the opening of applications, there will be a two-month evaluation period. Applications will be evaluated for compliance with the DOE requirements on legal, technical and financial capability.

According to the DOE, applications are required to include the proposed work program and economic development of the proponent.

Endorsement of winning applicants for coal and petroleum is targeted on November 21, 2014 and May 4, 2015, respectively.

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