Tuesday, October 23, 2018

DOE ready to cancel service contract for Colossal Petroleum


By Lenie Lectura -

THE Department of Energy (DOE) is poised to cancel the awarding of a petroleum service contract (PSC) to local firm Colossal Petroleum Corp., an affiliate of listed Coal Asia Holdings Inc., if it will not push through with the exploration.
“We warned them that if they will not be supportive, we will be obliged not to push through with the awarding. That should be very clear,” Energy Undersecretary Donato Marcos said.
Marcos said the DOE will write to Colossal soon. “If they do not comply soon, their proposal may be disqualified.”
Colossal was earlier qualified to explore Area 5, a 576,000-hectare block in waters east of Palawan, and Area 7, a 468,000-hectare  block within the disputed Reed Bank.
Energy Secretary Alfonso G. Cusi said Colossal is not included to follow what Ratio Petroleum Ltd. of Israel did. Ratio was recently awarded a PSC for Area 4 (East Palawan Basin) of the Fifth Philippine Energy Contracting Round (PECR5).
“Ratio agreed it will pursue it whatever ruling—favorable or not—the Supreme Court will issue regarding income-tax interpretation. The problem is Colossal is not in agreement to do what Ratio did. If [Colossal] will not pursue it then we don’t have a choice but to terminate it,” Cusi said.
The SC case Cusi was referring to pertains to the petition for certiorari filed by the Malampaya consortium, which is opposed to the Commission on Audit ruling.

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