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Philippines touts upstream commitment
The government has reassured investors that its upstream bid round is on the verge of completion
COMMENTARY
WHAT:
The DOE has said it will open bids as soon as the lockdown is lifted.
WHY:
Manila has extended its quarantine measures until June.
WHAT NEXT:
Long-term energy security will be at risk if investors lose faith in the government’s ability to manage the current crisis.
THE Philippine government is trying hard to convince potential investors that the energy sec- tor is still at the forefront of its priorities, even though the country remains under a coronavirus (COVID-19) lockdown.
Energy Secretary Alfonso Cusi said this week that his department had started processing applications and tenders for prospective nomi- nation blocks and that bids would be opened as soon as the quarantine measures were eased.
The official’s comments, that oil and gas developments have been slowed rather than stopped, have come a week after Philippine Pres- ident Rodrigo Duterte extended the lockdown in metro-Manila until June. The extension means the COVID-19 quarantine measures will last 80 days, surpassing even the 76-day lockdown enforced at COVID-19 epicentre Wuhan.
Nomination blocks
The Department of Energy (DOE) launched the Philippine Conventional Energy Con- tracting Program (PCECP) in November 2018, with the goal of promoting exploration investment. The programme allows the gov- ernment to award service contracts to local and international developers either via a com- petitive selection process or nomination.
The agency received four nominated areas for exploration in the West Philippine Sea – Areas 5, 6, 7 and 8 – earlier this year. The DOE gave other oil and gas companies 60 days to submit an offer on the areas, with deadlines on each expiring between May 5 and 8.
While the opening of the bids has been delayed, Cusi stressed that the process would resume as soon as the bidders could physically attend the opening process.
“For us at DOE, we want to proceed because the country needs it for energy security. The department is pushing [PCECP],” the Manila Bulletin quoted him as saying on May 19. “We will open [the bids] as soon as the quarantine is lifted, or when movement restrictions are eased, and people can start working and the companies can attend.”
Cusi said bids for all blocks would be opened despite the fact that some of Areas 6, 7 and 8 lie within waters disputed by China. He said the Philippine government had insisted on its claims that the “[territory] is ours” even as China pro- moted its nine-dash line claims.
Duterte has traditionally oscillated between claiming the country’s sovereignty over the con- tested waters and trying to appease Beijing with talk of forming joint exploration initiatives. He
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