DOE sets ‘challenge period’ for 3 petroleum blocks in WPS

Published April 10, 2020, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2020/04/10/doe-sets-challenge-period-for-3-petroleum-blocks-in-wps/

The Department of Energy (DOE) has slated a 60- day “challenge period” for three petroleum blocks that it has been dangling to investors for exploration and prospective development at the West Philippine Sea.

The prescribed challenge period for nominated petroleum blocks 6, 7 and 8 will wind down on May 5 and May 8 this year, according to the energy department.

The department similarly indicated that for nominated area 6, the deadline for submission of offers will be May 5; while for areas 7 and 8, the submission cut-off date will be May 8.

“Deadline for the submission of documents by applicants (counter-proponents) must be 60 calendar days from date of publication by the nominating party,” the DOE has emphasized. The challenge period was launched first week of March.

Under the Philippine Conventional Energy Contracting Program (PCECP) of the Duterte administration, an interested party may nominate a petroleum service area or block of its choice; and such shall be subjected to a “challenge period” by the DOE.

Upon submission of ‘challenge-offers’ or even without bids from parties, the energy department is mandated to render subsequent decision on the awarding of the specified service area to a qualified investor after compliance with the challenge prescription as well as other requirements.

The challenging party or investor will have to pay the corresponding application fee of ₱1.0 million with the Treasury Division of the DOE. That is to underpin its interest to submit a tender, as set forth under the PCECP rules.

A nomination scheme is one of the modes set on “offer submission” and interested parties can do that year-round based on their area preference, timeframe as well as budget.

The other investment mode laid down by PCECP is competitive bidding on pre-determined areas (PDAs) – the first batch of which was undertaken by the energy department last year.

In that bidding round, the DOE has not cornered as much interest as it wished for, hence, the agency went on an aggressive roadshow across continents last year to pro¬mote the country’s petroleum con-tracting round.

The aggressive quest for new oil and gas discovery is to align a replacement for the well-anticipated decline or cease of production at the Malampaya field either due to contractual lapse or finite resources.