Wednesday, July 20, 2011

Govt to pursue bids for coal concessions



THE Department of Energy will push through with the auction of coal exploration and development contracts within the year. Secretary Jose Rene Almendras said the proposed bidding will follow the recently concluded Public Energy Contracting Round 4 for oil and gas projects.

“We will be pushing through with coal. We want to make it a good offering,” he said.

The DOE has yet to identify the coal concessions that would be offered to investors as it plans to clear “opposition” to potential projects before undertaking the auction.

Coal is considered one of the cheapest fuels for electricity production and takes up roughly over a quarter of the country’s power generation mix. But various socio-civic groups have opposed the use of coal because of its deleterious impact on people’s health and the environment.

Almendras said a number of coal operating contracts awarded by the government to developers have not pushed through because of such opposition.

“I want to have more areas clear from opposition for the development to push through. We have COCs that have not moved and it’s not the fault of the developer—the developer could not proceed with development because of issues within their areas,” he said.

The proposed bidding round for coal projects will fall under PECR 5.

The DOE recently conducted the PECR for oil and gas projects, offering 15 service contracts to investors.

So far, 13 petroleum SCs, 19 COCs and a handful of geothermal exploration development and exploration contracts that are worth well over P1 billion in investments were awarded under the PECR.

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