Opening up of BARMM to investments cheered
Reopening the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) to petroleum and coal exploration sets a “good precedent” for investments in the country despite risks, according to a group of petroleum companies.
Indeed, around 50 local and international oil and gas exploration companies attended the launch of the Department of Energy’s (DOE) conventional energy bid round for BARMM.
Attendees included Manuel Pangilinan-led PXP Energy Corp., tycoon Enrique Razon Jr.’s Prime Energy Resources Development BV, and multinational oil and gas firm Exxon Mobil Corp.
Edgar Cutiongco, president of the Philippine Petroleum Association (PPA), told reporters on Monday that the BARMM exploration areas had long been closed due to security concerns.
PPA is composed of around 30 oil and gas companies in the country.
“The main concerns before in that part of the Philippines are peace and order. Now [the government] is saying that it’s safe to operate and that’s a good thing … It sets a good precedent for investments,” he said on the sidelines of the DOE first Conventional Energy Bid Round for BARMM.
Big risks
Cutiongco, who also serves as country manager of NPG Pty. Ltd., the operator of Service Contract 14C-1 off northwest Palawan province, likewise recognized that investors faced the risk of not finding any reserves during explorations.
Industry players estimate petroleum and coal explorations to take up to eight years.
Depending on the depth of the wells drilled, investments in exploration can range anywhere between $10 million and $70 million per well, according to Cutiongco.
The DOE is offering four areas in BARMM for petroleum and coal exploration.
Three areas encompassing Cotabato City and the provinces of Lanao del Sur, Maguindanao del Norte and Maguindanao del Sur were offered for petroleum exploration.
The sole predetermined area offered for coal exploration covers 14,856 hectares in Lanao del Sur.
According to Energy Undersecretary Alessandro Sales, resources had been discovered in these areas.
At the same time, however, only limited data is available, particularly for coal exploration.
Sales noted that interested bidders needed to submit an exploration program and collect new data, on top of financial and legal requirements.
“We are very pleased that known oil and gas exploration and production players in Asia, North America and Europe, including local players, have come to this event and displayed a keen interest in evaluating our country’s petroleum potential,” Sales said.
“I encourage you to further evaluate these petroleum potentials. We have the best contractual terms to offer that could match and compete with other countries,” he added.
