Business World Online
Posted on June 30, 2011 11:43:55 PM
FIFTEEN oil and gas exploration contracts expected to be awarded next year will bring in at least $7.5 billion in new investments, government officials yesterday said.
The country, Energy Secretary Jose Rene D. Almendras said at the launch of the 4th Philippine Energy Contracting Round, can also look forward to earning substantial royalties when the contracts are declared commercial.
“We expect investments in service contracts to be about $100 million per well, so with three to five wells per service contract there is about $500 million in each service contract,” Mr. Almendras said, adding that so far only 10% of the Philippines’ oil potential has been tapped.
The 15 contracts on offer cover onshore and offshore areas totalling some 10,000 hectares. The Energy department said it would release technical studies to interested investors on July 30. Investors have until December to signify their intention to bid and a non-refundable application fee of P100,000 per area will apply.
Mr. Almendras stressed that none of the contracts being offered were near disputed areas in the South China Sea. Some were previously offered in a previous contracting round but were cancelled after the winning investors failed to push through with their work plans.
“Some areas were cancelled contracts, mostly those in the Sulu Sea. We have every right to cancel these contracts because the agreement was to move forward with their proposed program,” Energy Undersecretary Jose M. Layug, Jr. said.
In a keynote speech, Vice-President Jejomar C. Binay said, “We want to assure fair and judicious contracting round. We want this contracting round to signal our support to the industry.”
The Energy department earlier postponed the contracting round due to questions raised by the Commission on Audit (CoA) regarding the taxation of contracts awarded by the state.
The CoA said in a 2009 audit that the government was shortchanged by about P53.1 billion in corporate income taxes from the Malampaya natural gas project for the years 2003-2009 as the levy was deducted from the government’s 60% share of the venture’s net said..
Mr. Almendras said the Energy department has met with the CoA and hopes to settle the issue within the year. -- E. N. J. David
“We expect investments in service contracts to be about $100 million per well, so with three to five wells per service contract there is about $500 million in each service contract,” Mr. Almendras said, adding that so far only 10% of the Philippines’ oil potential has been tapped.
The 15 contracts on offer cover onshore and offshore areas totalling some 10,000 hectares. The Energy department said it would release technical studies to interested investors on July 30. Investors have until December to signify their intention to bid and a non-refundable application fee of P100,000 per area will apply.
Mr. Almendras stressed that none of the contracts being offered were near disputed areas in the South China Sea. Some were previously offered in a previous contracting round but were cancelled after the winning investors failed to push through with their work plans.
“Some areas were cancelled contracts, mostly those in the Sulu Sea. We have every right to cancel these contracts because the agreement was to move forward with their proposed program,” Energy Undersecretary Jose M. Layug, Jr. said.
In a keynote speech, Vice-President Jejomar C. Binay said, “We want to assure fair and judicious contracting round. We want this contracting round to signal our support to the industry.”
The Energy department earlier postponed the contracting round due to questions raised by the Commission on Audit (CoA) regarding the taxation of contracts awarded by the state.
The CoA said in a 2009 audit that the government was shortchanged by about P53.1 billion in corporate income taxes from the Malampaya natural gas project for the years 2003-2009 as the levy was deducted from the government’s 60% share of the venture’s net said..
Mr. Almendras said the Energy department has met with the CoA and hopes to settle the issue within the year. -- E. N. J. David
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