Energy department set to bid out service contracts, except for oil, gas exploration

Business Mirror

WEDNESDAY, 08 DECEMBER 2010 20:19 PAUL ANTHONY A. ISLA / REPORTER

THE Department of Energy (DOE) is now bidding out service contracts to potential investors and developers of geothermal and coal projects.

Energy Secretary Jose Rene Almendras said the DOE was pushing its Philippine Energy Contracting Round (PECR) but that potential oil and gas areas were not among those to be bidded out to developers.

Almendras said the DOE opted to defer the bidding of the oil and gas areas pending the resolution of the Commission on Audit’s (COA) issue on the corporate income of operators being taken from the government’s share on the project.

“We were hoping initially that we would be able to push through with the bidding, pending the resolution of the case. But recent meetings with COA have given us an impression that it would probably be best not to [push through with it] for the time being,” he said.

In November the DOE said it might end up bidding out 15 service contracts to investor-groups willing to help develop the country’s oil and gas and coal resources.

Almendras also said he was going to cancel three existing service contracts.

“We will not tolerate service contracts that are not being attended to,” he said when asked to elaborate.

If a company commits itself to a service contract, a work program should be designed and followed, he said. “We will certainly encourage you to abide by it. Otherwise, we’re going to cancel your service contract and we’ll give it to somebody who’s more serious,” Almendras said.

The petroleum-contract areas to be bidded out are probably those in Cagayan, Central Luzon, Northwest Palawan, Mindoro Cuyo, East Palawan, Cotabato; the coal areas include those in Argao, Cebu; Bislig, Surigao del Sur and Sioncon, Zamboanga del Norte.

Almendras earlier said his department was doing an inventory of all the service contracts it has issued, including those in the South China Sea.

He said the DOE has informed all concerned about the review.

“There have been discussions [on the contracts within the South China Sea] in that effect. But I cannot comment on these things,” he said.

Almendras said the government would push through with the exploration deals that have been done properly. He said those that have been questioned must await the decision of the courts.

“We have to make sure that everything going to be done properly,” he said.