Updated October 14, 2019, 11:08 AM By Myrna M.
Velasco
At least six petroleum service
contracts (PSCs) have been recommended by the Department of Energy’s (DOE)
Centralized Review and Evaluation Committee (C-REC) for the final evaluation
and approval of Energy Secretary Alfonso G. Cusi.
C-REC Chairman and Undersecretary
Donato D. Marcos indicated that the proposed PSCs had already been submitted to
the Office of the Secretary, and if all of the contracts will be approved, they
will be recommended next to the Office of the President for the signing of
service contracts.
There had been seven submissions
received by the DOE in its August petroleum bid round done under the ambit of
the Philippine Conventional Energy Contracting Program (PCECP), which is the
modified version of oil and gas blocks contracting under the Duterte
administration.
It has been revealed by the DOE’s
C-REC though that one of the PSC tenders had been rendered “disqualified” on
technical grounds, due to “error” in one of its submitted requirements.
Of the pre-determined areas (PDAs)
auctioned by the DOE, four submissions had been received, chiefly from: Israeli
firm Ratio Petroleum for Area 3 in East Palawan basin; Sulu Sea Energy
Resources and Development Corp. and Esmaulana Global Venture Co., Inc. for Area
6 which is in Sulu Sea; the joint venture of Philodrill Corp. and PXP Energy
Corp. for Area 7; which is also in Sulu Sea; and Esmaulana Global Venture Co.,
Inc. for Area 10 which is the Agusan-Davao basin.
For the nominated areas, it was Sulu
Sea Energy Resources and Development Corp. that made an offer for the Sulu Sea
basin; Troika Giant Power Corp. for East Palawan; and Superior (SG) Shipyards,
Inc. for Ragay Gulf.
The energy department’s evaluation
committee hinted that the “disqualified” offer covers one of the PDA blocks in
a basin in Mindanao, hence, only three from that bid round had been recommended
for the secretary’s final go signal.
In the template petroleum service
contract issued by the DOE, it upheld the 60:40 royalty sharing prescription of
Presidential Decree 87 or the Philippine Oil and Gas Law – and that the income
of the service contractor shall be integrated into the revenue share of the
Philippine government.
Under Section 11.01 of the PSC model
contract, it was stipulated that “the contractor shall be liable each taxable
year for Philippine income tax under the provisions of the National Internal
Revenue Code and the Act, both as amended,” emphasizing that “the Philippine
income tax shall be part of the government share, subject to applicable laws,
rules and regulations.”
On the petroleum blocks that failed
to fetch bids during the recent PCECP, the C-REC propounded that these be
transformed as “areas for nomination” and the investors could submit tenders on
them year-round or any time at their preference.
From the latest contracting round,
the DOE admitted that “weak data” had been assessed as among the factors that
weighed down investors’ interest – and on top of that, the department is also
tugging its way into enticing investors with more extensive technical
experience in oil exploration and development; plus the global players that
have multi-billion dollar financial resources in case discoveries will turn out
commercially viable in the future.
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