The Department of Energy (DOE) has inked a deal with the Japan Oil, Gas and Metals National Corporation (JOGMEC) for a targeted updating of a feasibility study for the Philippines’ plan to venture into oil stockpiling.
The memorandum of agreement (MOA) sealed by the parties had been intended for bringing up to code the 2002 Philippine National Oil Contingency Plan; and to set forth recommendations for the country’s propounded establishment of Strategic Petroleum Reserve (SPR) program.
Energy Secretary Alfonso G. Cusi stated that the pact with JOGMEC is a manifestation of “Japan’s commitment to help the Philippines succeed in attaining its energy security goals.”
It is worth noting that the Philippines has been keen to set up its oil stockpiling facility, but such plan has always been hobbled with questions ranging from the entity that can ably manage it, the funding source, the volume of reserves to be sustained at the SPR, as well as outlining the conditions that shall warrant commodity drawdown from the facility.
In the MOA with JOGMEC, the energy department stated that the study-updating shall be carried out within eight months – and the parties shall have a “one year consultative period” following the submission of the final report.
Under the MOA, both parties would have to re-assess “the international petroleum products’ supply and demand situation in the past five years and the expected growth for the next 20 years.”
The parties will also scrutinize the state of SPR programs in the last five years and how these have been utilized to address supply disruptions, the existing international oil supply security agreements both in the ASEAN as well as the other regional blocs and how the Philippines could fit in into these paradigms.
Further, the study will determine the storage facilities for crude and finished petroleum products in the Philippines in the last five years and their growth trajectory in 20 years – and such shall cover those that are owned both by private as well as that of government-run entities.
According to the DOE, the study updating will also re-evaluate the existing Philippine policies and the implementation frames across scenarios – including addressing oil supply for normal demand, and if there would be emergency or contingency situations that have to be responded to – whether these are triggered by international or domestic geopolitical events.
Additionally, the parties agreed to analyze the gaps in the oil storage facilities in the country, “to address the existing and expected growth in demand, as well as the contingency/emergency response during any international and domestic supply disruption.”
The energy department likewise emphasized that the role of state-run Philippine National Oil Company and other relevant government agencies shall be clearly examined and considered on the country’s envisioned plunge into oil stockpiling undertaking.
Cusi asserted that despite the pummeling of the Covid-19 pandemic, “energy security has always been at the core of the department’s policy agenda.”
He stressed that the DOE has been “proactively seeking all potential ways to ensure the availability of sufficient energy supply, most especially in the face of local or global disruptions, such as geopolitical movements, global market volatilities and more recently, this Covid health crisis.”