Prospective coal sites up for auction

By: Amy R. Remo

Philippine Daily Inquirer

12:43 am | Wednesday, July 20th, 2011

The Department of Energy (DoE) is preparing to auction off by September contracts to explore and develop highly prospective coal areas, as the government fast-tracks the development of this resource to secure national energy supply.

“We’ll be pushing through with the coal bidding (within the year). We want to make it a good offering. We already have a few areas that are clear from opposition. Before, we had three areas (up for auction), but I want to have more areas cleared from opposition,” said Energy Secretary Jose Rene D. Almendras.

“We have coal operating contracts (COCs) that have not moved, although that’s not the fault of the developer. The developer could not proceed because of certain issues (it faces) within the coal areas,” Almendras added.

Energy Undersecretary Jose M. Layug Jr., meanwhile, revealed that the DoE plans to auction off around four to five contracts, but would consider further increase the number, given nominations for frontier areas.

“We are conducting an evaluation of the blocks to be offered through the Philippine Energy Contracting Round (PECR-4) and we will finalize it by this month,” Layug said.

The PECR 4 for coal followed the successful launch of the PECR 4 for oil and gas last June 30, when contracts to develop 15 prospective petroleum blocks were offered to local and foreign investors for exploration and development.

The PECR 4 provides for a transparent and competitive system of tendering of the country’s onshore and offshore resource blocks (coal, petroleum and geothermal). Under this process, the DoE would determine the winning bidders based on specific technical, legal and financial criteria, after which Malacañang would award the service contracts.

The DoE earlier identified 12 prospective coal areas that could yield 1.806 billion metric tons.

Data from the DoE showed that Luzon holds a total resource potential of 455.5 million MT (MMMT) in four areas—Cagayan Valley with 336 MMMT; Polilio, Batan, Catanduanes, 17 MMMT; and Mindoro, 100 MMMT.

Visayas was found to have total potential resource of 766 MMMT in four areas—Semirara Coal Basin, which holds an estimated 570 MMMT; the Negros Coal Basin, 4.5 MMMT; and Cebu Coal Basin, 165 MMMT.

The energy department also found Mindanao to hold a total resource potential of 584.4 MMMT in four coal-rich areas including Surigao, 209 MMMT, and Zamboanga, 45 MMMT.