The Department of Energy (DOE) has awarded its first coal operating contract (COC) in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
In collaboration with the Ministry of Environment, Natural Resources, and Energy (MENRE), the DOE said it has granted the COC for a pre-determined area (PDA) within the BARMM.
The contract aims to stimulate economic growth and energy self-sufficiency in the region, the DOE said.
Filipinas Systems, Inc. (FSI), a unit of the construction firm FF Cruz & Co., Inc., has been awarded the contract to explore coal in Kapai and Tagoloan II in Lanao del Sur.
Under the contract, FSI plans to invest approximately P19 million in a two-year exploration program.
Upon reaching the development and production stage, the firm will provide an annual scholarship of P150,000 to qualified individuals from the contract area to support local communities.
FSI has also committed to paying a one-time bonus of P250,000, offering development assistance valued at another P250,000, and providing P75,000 annually for training during the exploration period.
This amount will increase to P200,000 per year once the project progresses into the development and production phases.
According to the DOE, the contract resulted from the co-signing of the Intergovernmental Energy Board (IEB) circular in July 2023 by Energy Secretary Raphael P.M. Lotilla and BARMM Chief Minister Ahod Ebrahim.
The circular establishes a partnership between the national government and the Bangsamoro government to collaborate on awarding Petroleum Service Contracts (SCs) and COCs within BARMM. This initiative aims to grant the region energy independence through the responsible exploration and development of local energy resources.
This framework will also facilitate advancements in energy infrastructure and economic opportunities in the area.
“The awarding of the first COC in BARMM is a landmark moment for both governments. It reflects our collective commitment to advancing energy development and resource management in the region, empowering BARMM to play a crucial role in the country’s energy future,” said Lotilla.
“This partnership will not only foster energy independence for the Bangsamoro region but also create pathways for sustainable economic growth and development,” he added.
Furthermore, Lotilla explained that the national and BARMM governments will manage the development of fossil fuels such as petroleum, gas, and coal, while renewable energy (RE) sources, aside from hydropower generated from Lake Lanao, fall under the region’s authority.
“The national government and DOE are committed to assisting BARMM in every way possible to harness its solar, wind, geothermal, and other RE sources,” he stated.
The DOE noted that 80 percent of the Philippines’ coal requirements are met through imports, with 98 percent of these coming from Indonesia. Consequently, any domestic coal sources will help reduce foreign dependence.
“For BARMM and MENRE, this development enhances autonomy over its abundant energy resources, opens up greater economic opportunities, improves geological knowledge, and offers the potential for community uplift through job creation and development programs,” the DOE added.