Posted on July 21, 2016
http://www.bworldonline.com/content.php?section=Economy&title=energy-dep&8217t-lists-service-contracts-for-oil-gas-coal-development&id=130728
THE Department of Energy (DoE) under the new administration has listed down some of its targets, including the award of service contracts for the upstream oil and gas development and possibly exploration service contracts for indigenous coal, an agency official said on Wednesday.
Mylene C. Capongcol, DoE officer-in-charge undersecretary, told conference participants during the 4th Annual Philippines Power and Electricity Week about the department’s plan to continue conducting the Philippine Energy Contracting Round (PECR) for the upstream oil and gas development.
She said the DoE was targeting “18 service contracts for award from now to 2030” that will form part of estimated petroleum reserves of 94.74 million barrels of oil, 3.96 trillion cubic feet of gas and 41.34 million barrels of gas and 41.34 million barrels of condensate.
“In terms of indigenous coal, we are monitoring 48 exploration service contracts for declaration of additional coal reserves in commercial quantity (“mineable”) to enable the conversion of these service contracts to development/production contracts. With this, we estimated the in-situ coal reserves to reach 4,297.7 MMT [million metric tons] by 2030,” she said.
Ms. Capongcol disclosed the targets amid projections by the new administration that gross domestic product (GDP) will grow by 6-7% this year, 6.5-7.5% in 2017 and 7-8% until 2022, “with most of the spending expected to support higher infrastructure needed to deliver basic services to the people.”
“Thus, higher growth for energy use specifically for electricity is expected, entailing significant amount of investments mainly coming from the private sector,” she said.
She also said further investments were needed for the downstream oil industry, despite achieving significant growth in the past, “to improve competition and achieve resiliency in the very volatile nature of oil prices in the international market.”
“With this, we are inviting foreign investors in oil refinery/facility to provide a more stable and bigger oil supply base for the country,” she said.
The targets are amid the backdrop of the 2015-2030 distribution development plan for 140 distribution utilities, which expect the Luzon grid to need additional capacities of about 5,000 megawatts (MW); the Visayas grid, 1,300 MW; and the Mindanao grid, 900 MW.
“In Mindanao specifically, we are looking at new developments to make investments more attractive such as putting in place an electricity market and ultimately, making the interconnection with Luzon and Visayas possible,” she said.
Ms. Capongcol also said one of the priorities of Energy Secretary Alfonso G. Cusi is the interconnection of the Mindanao grid to the Luzon-Visayas grid to allow sharing of excess capacity among all grids in the country.
“We have better expectations as we look forward to a better peace situation in Mindanao, which [has] been keeping the development of the grid from progressing,” she said.
The Energy Regulatory Commission (ERC) on Jan. 21 issued a provisional authority to the National Grid Corporation of the Philippines to conduct a “desktop study and hydrographic survey” for the western route of the Visayas-Mindanao interconnection project using the Cebu-Negros to Zamboanga del Norte route.
Ms. Capongcol said biodiesel would increase from the current blend of 2% to 5% in the short-term or until 2019, and reach 20% in the long-term. For bioethanol, she said the increase would start at 10% in the short-term and 20% in the medium to long-term. She said the department was looking to promote a “voluntary increase” in the bioethanol blend by 80% in the long term depending on the availability of feedstock.
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