COLOSSAL Petroleum Corp. appears to have abandoned its bid to explore oil and gas resources in two areas in Palawan, according to an official of the Department of Energy (DoE).
“[It’s] semi-withdrawal or abandonment,” said DoE Undersecretary Donato D. Marcos when asked about the status of the project that remains unresolved despite a previous meeting with Colossal.
Colossal, which Mr. Marcos described as a Filipino-led company, was among the winning bidders of the areas offered by the previous administration for exploration under Philippine Energy Contracting Round (PECR) 5 in 2014.
Israeli firm Ratio Petroleum Ltd. won a separate exploration area under the same contracting round.
In October, Ratio was formally awarded the petroleum service contract for Area 4 in the east Palawan basin covering 416,000 hectares for potential oil and gas resources.
Area 5, which is within Philippine territory, and Area 7, which is within the disputed area with China, were the ones won by Colossal.
“What was agreed upon during the meeting, hindi sila nag-reply (they did not reply),” Mr. Marcos said, adding that the discussion with Colossal took place about month ago.
Nag-meet kami, hinihingi namin ang kanilang inputs, ang kanilang decision (We met, we asked their input, their decision),” he said.
Mr. Marcos said he would seek a collegial decision of the centralized review and evaluation committee (CREC) on the way forward for Colossal’s project.
“I’m the chairman of that (CREC). It’s a collegial decision. It’s not a one-man decision. It has to be submitted to a legal body, which is CREC,” he said.
The DoE wants Colossal to agree to the agency’s call for it to abide by the outcome of a legal case that could determine the viability of the service contract.
The pending legal case pertains to a ruling from the Commission on Audit (CoA) that the government cannot assume the income tax due from the consortium operating the Malampaya gas-to-power project. Consortium members questioned the ruling, the resolution of which is pending with the Supreme Court.
The awarding of the contracts had been pending as problems arose, including the CoA ruling. The PECR was established as a transparent and competitive system of awarding service or operating contracts for prospective petroleum or coal areas within the country.
In August 2017, the DoE issued policy changes on energy exploration by doing away with the PECR and replacing it with the Philippine Conventional Energy Contracting Program (PCECP). The revised and transparent petroleum service contract awarding mechanism would allow investors to bid for exploration projects through a competitive selection process or by nomination. — Victor V. Saulon