THE 5th Philippine Energy Contracting Round (PECR-5) for petroleum was not that attractive to investors, as few bids were received for potential petroleum-producing areas.
During yesterday’s opening of submitted bids, only four locations from the 11 available potential petroleum areas drew interest from investors.
Energy Resource Development Bureau director Rino Abad attributed the low turn out to continuing low global oil prices.
“We cannot deny the fact that there are problems being encountered in the area of oil and gas due to low oil prices. Lots of companies are doing adjustments in terms of their budgets,” Abad told reporters after the opening of the submitted bid documents in Taguig City.
Because of the volatility in crude prices, Abad said there are companies who tend to stick to their current portfolio rather than add.
The service contracts that received bids include Area 1 in Ragay block, Areas 4 and 5 in Northeast Palawan block and Area 7 in Recto Bank block.
Yulaga Oil Exploration Enterprises was the sole bidder for the 468,000 hectares Area 1, which has a resource potential of 3,552.3 million barrels of oil (MMBO) and 2,258.68 billion cubic feet gas (BCFG).
But the company was disqualified from further evaluation because of a technicality as it lacked important documents.
Ratio Oil Exploration, the sole bidder for the 416,000 hectares Area 4 has been considered by the Department of Energy (DOE) to be qualified for further evaluation as developer of the service contract.
Area 4 has a resource potential of 1,230 MMBO and 2,062.75 BCFG.
Colossal Petroleum submitted bids for Areas 5, which has an acreage of 576,000 hectares with resource potential of 1,897.4 MMBO and 2,846.6 BCFG, and 7, which has an acreage of 468,000 hectares with resource potential of 165 MMBO and 3,846 BCFG.
According to the DOE, the average exploration costs for each activity in the service contract areas is estimated at $40 million.
The bids will be subjected to an evaluation process to further review the legal, financial and technical capacity of the companies.
The areas without bidders, Abad said, might be assessed and included in the next PECR, which is composed of blocks from Panay, Southeast Palawan and West Luzon.
The PECR is conducted by the government to offer investors various areas in the country for possible fuel and coal reserve exploration.