By Myrna M. Velasco
SINGAPORE – At least 14 companies, including multinational energy firms, have already signified interest in the US$2.4 billion worth of upstream petroleum investments offer of the Philippines at its week-long roadshow in this city state.
The foreign firms eyeing ventures in the upstream petroleum sector include French multinational energy giant Total S.A., Singaporean firm Kris Energy Pte Ltd., the subsidiary of American firm CalEnergy Resources (Australia) Ltd., Canadian firm Husky Energy Inc., Japanese firm JX Nippon Oil and Gas Exploration (via its Malaysian subsidiary); Australian firm Nido Petroleum and its partner Tamarind Galoc Pte Ltd., and Chinese company Polyard Petroleum International Group Limited; while the others are still being firmed up to-date.
Several firms with their base in the Philippines are also joining the roadshow, including Philodrill Corporation; and PXP Energy, the upstream petroleum investment arm of the conglomerate held by tycoon Manuel V. Pangilinan.
The delegation of Philippine Department of Energy (DOE) officials have scheduled one-on-one meetings with the interested firms; as well as presentations with business chambers in Singapore, including the Singapore Malay Chamber of Commerce and Industry (SMCCI); the Singapore Business Federation; and a networking activity with the South East Asia Petroleum Exploration Society.
The DOE will likewise be doing its roadshow presentations at the Philippine Embassy in Singapore as well as with the Department of Trade and Industry-Philippine Trade and Investment Center (DTI-PITC)-Singapore.
The pre-determined blocks on offer comprise of four (4) areas in West Luzon basin; three (3) areas in East Palawan; three (3) blocks in Sulu Sea; two (2) areas in Cotabato; and one each in Cagayan and Agusan-Davao basins. The DOE will also orient investors on the year-round contracting facet of the Duterte administration-designed Philippine Conventional Energy Contracting Program (PCECP), wherein investors would be able to submit unsolicited proposals on their targeted or preferred petroleum blocks at any given time. The calculated investment magnitude of US$2.4 billion, according to the DOE, just covers the 14 pre-determined areas (PDAs) that are being dangled to investors via the PCECP. Estimates are up to the completion of their seven-year program, which include drilling of the wells; but exclude yet any prospective investments if there would be commercial scale discoveries.
Total investments per block could range from US$48 million up to US$303 million – covering work phases from geological and geophysical surveys, acquisition of data and up to the drilling of about three exploration and appraisal wells.
For these government-predetermined blocks, according to Energy Undersecretary Donato D. Marcos, targeted investments had been set higher because the areas are combination of eight (8) shallow and six (6) deep water seismic survey and exploration activities.
Marcos explained that drilling cost per well in shallow waters amounts to US$15 million; while those in deep waters will require capital outlay of US100 million per well.
The energy official similarly expressed hope on portended success of the PCECP, with the government trying to resolve all the issues raised by many of the prospective investors, including the tax issue tied to the Malampaya project and the diplomatic issues with China.
“We are very optimistic that the PCECP is really taking up positive reaction from investors. We are looking forward to securing competitive offers in the sector,” the energy official stressed.
For the contract areas in Sulu, Marcos noted that investors shall also be apprised on the provisions of the newly-enacted Bangsamoro Organic Law.
“The prescriptions of the Bangsamoro Law and its implication to investments in the sector will also be explained fully by the DOE during the roadshow activities,” Marcos said. (MMV)