Secure energy sector (1)

Irreparable worrywarts and bleeding hearts have been blaming the Department of Energy’s previous leadership for what they claimed as six years of neglect referring to the previous administration yet all arguments presented were apparently fed by powerful principals who were hounded to deliver on their commitments to the government.

Allegations about what was claimed through their jaundiced eyes as uncertain policies flew.

Before President Rodrigo Duterte took the helm of government, energy supply shortages were prevalent, particularly in Mindanao.

In exasperation, the late former President Noynoy Aquino had indicated that Filipinos should resign to paying higher bills if they wanted to have a steady energy supply.

The offered solutions were through Public-Private Partnership projects that, however, failed to take off.

The recent decision of the administration of President Bongbong Marcos to give priority to energy exploration as fuel prices surge due to the trifecta of high prices, the lingering effects of the pandemic, and the effects of the Eastern European conflict, had its roots in the forward-looking policies to secure energy security.

To boost petroleum exploration, the Philippine Conventional Energy Contracting Program or PCECP was crafted in 2018. It allows the entry of more upstream petroleum players through licensing based on the particular situation in a particular sector of the energy industry. The initial phases of oil and gas production, involving exploration, drilling, and extraction of crude oil and natural gas constitute the upstream industry.

The first service contract signed under the Duterte administration was SC 76, which was awarded to the Israeli firm Ratio Petroleum Ltd.

The most recent Department of Energy license was awarded under Petroleum Service Contract 77 to SK Liguasan Oil and Gas Corporation on 7 April 2022.

Another service contract for a second area with Ratio Petroleum was likewise approved, as well as the awarding of a service contract to the state-owned Philippine National Oil Co.-Exploration Corp.
On Tuesday, the Department of Energy allowed Nido Petroleum Philippines Pty. Ltd. to start a survey of the Cadlao oil field this quarter.

Service Contract 6B will likely result in the drilling of two wells by the first half of next year.

Cadlao oil field could be producing oil towards the second half of 2023 with recoverable volumes of five to six million barrels of oil.

The search for oil becomes imperative for two reasons: high global prices and the depletion of the Malampaya gas field.

The Malampaya depletion was also addressed through the development of a liquefied natural gas industry. The development of this sector is expected to fortify energy security while supporting the objectives of the Clean Energy Scenario indicated in the Philippine Energy Plan 2020 to 2040.

To date, the DoE has approved the permits of six proposed LNG Regasification Terminal Projects, including the projects of Linseed Field Corporation and FGEN LNG Corporation.

From 2016 to 2021, Service Contracts that are in the production stage, such as the Malampaya gas field, yielded 6.97 million barrels of oil, 851.6 billion cubic feet of gas, and 22.5 million barrels of condensate.

In the coal sector, production in 2021 reached 12.7 million metric tons, with Semirara accounting for 99 percent of the total.

There are currently 27 Coal Operating Contracts, 21 of which are in the development and production stages, while six are in the exploration stage. Run-of-mine coal production during the same period reached 81.33 million metric tons, the majority of which came from Semirara.
(To be continued)

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