posted March 31, 2016 at 11:55 pm by Alena Mae S. Flores
The Energy Department will ask
President Benigno Aquino III to help resolve a 2015 Supreme Court ruling that
nullified a service contract with a Japanese exploration company, a decision
that may threaten the oil and gas industry.
“We will elevate the matter to the
president because it involves contracts,” Energy Secretary Zenaida Monsada told
reporters.
Industry players warned that the
court’s decision nullifying service contract 46 with Japan Petroleum
Exploration Co. Ltd. covering Tañon Strait between the islands of Negros and
Cebu could affect all foreign service contracts.
Associate Justice Teresita Leonardo
de-Castro, who wrote the decision last year, said while the government was
allowed to enter into a service contract under the 1987 Constitution, service
contract 46 signed on Dec. 21, 2004 by the Energy Department and Japan
Petroleum on the exploration of a 2,850-kilometer area offshore Tañon Strait
failed to comply with the safeguards of the Constitution.
Section 2, Article XII of the
Constitution requires that service contract be authorized by a general law
signed by the president and reported to Congress.
The Philippine Petroleum Association
of the Upstream Industry said the court decision effectively stopped the exploration,
development and exploitation of petroleum resources within Tañon Strait.
The Energy Department’s legal
division and Energy Resource Development Bureau are set to come out with a
position paper on the impact of the ruling on the industry that will be
submitted to the Supreme Court.
PAP chairman Rufino Bomasang and PAP
president Sebastian Quiniones Jr. said in a letter to Monsada that the court’s
ruling “signifies that all service contracts entered into by the government of
the Republic of the Philippines with foreign-owned corporations involving
either technical or financial assistance for large –scale exploration,
development and utilization of petroleum, but signed only by the secretary of
the Department of Energy, not by the President, are null and void for being
unconstitutional,”
PAP, composed of foreign and local
oil and gas players, said the execution of a service contract with
foreign-owned corporations involving either technical or financial assistance
for large-scale exploration, development and utilization of petroleum, was
simply a contractual undertaking by the state and was not “one of those
exceptional circumstances that requires the personal action of the president.”
The group said the move would unduly
burden the president to engage in the nuances of the specialized field,
which should be left to a specialized body like the Energy Department.
Sources said among the service
contracts that could be affected by the ruling are gas producing SC 38 or the
Malampaya gas project and the oil producing SC 14C or the Galoc oil field, both
in northwest Palawan.
No comments:
Post a Comment