By
Lenie Lectura - January 13, 2020
THE Department of
Energy (DOE) has turned down a request from PXP Energy Corp. to reconsider its unsolicited
proposal to take over the operations of the Malampaya gas field from the
consortium once the service contract expires.
“As to the
reconsideration being sought by PXP on their unsolicited proposal for the
strategic development and utilization of an integrated gas hub [IGH] for
Malampaya, DOE maintained its position that it cannot accept or entertain any
proposal for an existing service contract,” said the agency’s Energy Resource
Development Bureau (ERDB) over the weekend when asked for an update.
PXP Energy had proposed
to develop and utilize an IGH at the site of the Malampaya project in
Northwest Palawan.
The DOE rejected this,
however, saying the unsolicited proposal cannot be accepted because the
service area covered by Service Contract (SC) 38 is still subject to a
valid and existing contract, which expires in 2024.
The Malampaya gas field
is being maintained and operated by a consortium led by Shell Philippines
Exploration BV with 45 percent in SC 38; Chevron Malampaya LLC, 45 percent; and
state-led Philippine National Oil Co. Exploration Corp., with the remaining 10
percent.
Davao businessman
Dennis Uy’s Udenna Corp. is acquiring the Chevron Malampaya’s entire stake in
the gas project.
“We advised PXP that we
cannot be cognizant of their proposal. The reason is very basic. We
have PCECP [Philippine Conventional Energy Contracting Program] and, under that
legal framework, there are only two ways in order to get a service contract and
oil exploration permits,” Energy Assistant Secretary Leonido
Pulido earlier explained.
Under the PCECP,
investors may engage in upstream exploration or development activities in two
ways: One, choosing an area from the 14 predetermined areas (PDAs)
offered by the DOE and, two, proposing their own areas for exploration.
“There are only two
ways. There is no third mechanism. What they are trying to do is create a third
mechanism, which is unsolicited proposal. You cannot nominate an area that is
already covered by a service contract. SC 38 is already covered by an exiting
contract so we can’t take cognizance of their unsolicited
proposal. We have to refuse it and we already advised them on
that,” explained Pulido.
Meanwhile, the DOE said
five PCECP applications are recommended for the issuance of petroleum service
contracts.
However, the peace and
order situation in Mindanao has prompted the agency to put on hold some of the
applications that are recommended for approval.
“Currently, there are five
applications that are recommended to award for a petroleum service contract.
But due to the ongoing bilateral discussions with BARMM [Bangsamoro Autonomous
Region in Muslim Mindanao], two applications were put on hold,” added the
ERDB.
No comments:
Post a Comment