By Genalyn Kabiling and Myrna Velasco
TThe Philippine government has forged a historic agreement with an Israeli company to search oil and gas in the country to help ensure the nation’s energy security.
The Petroleum Service Contract (PSC) for the East Palawan Basin was signed by President Duterte and Itay Raphael Tabibzada, the president and chief executive officer of Israel-based Ratio Petrolum Ltd., during a closed-door ceremony in Malacañang last Wednesday.
Under the initial seven-year contract, Ratio Petroleum can explore Area 4 covering 416,000 hectares across the East Palawan Basin for potential oil and gas resources.
The service area clinched by the Ratio Petroleum was part of the blocks offered under the defunct Petroleum Energy Contracting Round-5 (PECR) that the Department of Energy (DOE) had undertaken in May, 2015.
Under the seven-year work program that it has submitted for its service area, the DOE announced that it will be investing US$34.35 million (roughly P1.85 billion).
In a statement, the DOE stipulated that the Israeli firm’s “minimum total expenditure is valued at US$34,350,000 to be derived from studies, data gathering, and drilling activities over the initial seven-year contract duration.”
“This is the first petroleum service contract signed by the President under his administration,” Presidential spokesman Salvador Panelo said during a Palace press briefing.
“If you remember, the President made statements that our country needs to attain energy security and sustainability at the soonest possible time,” he said.
Panelo said the government was hopeful that potential oil resources would be discovered under the Philippine-Israeli undertaking.
Energy Secretary Alfonso G. Cusi emphasized that the signing of this new petroleum service contract will be a boost to the government’s long-term quest for energy security.
And this is most critical at this point given forecasts that oil prices globally may be reaching as high as US$100 per barrel by next year – and likely sustained at high-priced level in the coming years.
“The President has been very clear – our country needs to attain energy security and sustainability at the soonest possible time,” Cusi stressed.
He similarly stressed that “we are currently experiencing how our dependence on importation has left us at the mercy of price movements in the global oil markets.”
Given the country’s vulnerability being a heavy importer of oil, Cusi expounded that “we need to boost the exploration and development of our own energy resources.”
The energy chief said the signing of the service contract for ratio petroleum is a “right step” into that direction; although he noted that there is paramount need to further advance the exploration of oil and gas resources, especially at the period when gas production will already decline at the Malampaya field.