The petroleum industry in the country continues to grow as it keeps on meeting pressing demands. According to the Philippine Energy Situationer published by the Department of Energy (DoE) last 2017, petroleum products accounted for a hefty 48.3% share in the country’s total final energy consumption. The consumption of petroleum products increased by 6%, from 2016’s 15.4 million tons of oil equivalent (MTOE) to 16.3 MTOE in 2017.
“The steady behavior of domestic oil prices in 2017 encouraged consumption of gasoline and diesel, as levels went up by 8.8% and 6.5%, respectively, bringing in a combined share of 79.5% to total petroleum consumption,” the situationer read.
Furthermore, in DoE’s oil supply/demand report for full year (FY) 2018 published on the department’s Web site showed increases in oil supply.
“As of end-month December 2018, actual crudes and petroleum products inventory closed at 23,502 thousand barrels (MB) or 50-day supply equivalent; 44 days for crude oil and products in country stocks and 6 days in-transit. This was higher by 15.4% from December 2017’s 20,362 MB,” the report explained.
Crude oil import amounted to 85,753 MB, up by 10.4% from 2017’s 77,641 MB. Middle East accounted for the majority of the Philippines’ crude oil imports, with an 86.9% share, while 4.5% originated from the ASEAN region and 0.1% from local production.
Petroleum product imports totaled 97,573 MB for FY 2018, a slight increase by 0.2% from 97,415 MB the previous year. Within this category, diesel oil is at the top, albeit dropping by 3.3% from the previous year’s level. Fuel oil imports were down by 24.2%. Gasoline import was up by 10.7%. Liquefied petroleum gas (LPG) and kerosene/avturbo imports increased by 9.4% and 3.8%, respectively.
Meanwhile, demand for petroleum products increased by 1.4%, from 166,539 MB in 2017 to 168,805 MB in 2018. “This can be translated to an average daily requirement of 462.5 MB compared with [2017’s] level of 456.3 MB,” the report added.
Demand for diesel oil was at 41.8%; gasoline at 24%; LPG at 12.1%; kerosene/avturbo at 10.7%; fuel oil at 5.5%; and other products at 5.9%.
Petroleum products exports totaled 17,043 MB, increasing by 16.7% from 14,600 MB of FY 2017. Condensate is the top exported product, with 23.2% share (increasing by 9.8%). Gasoline and naphtha exports increased; while fuel oil, pygas and mixed xylene exports decreased.
With the apparently constant demand for petroleum, the DoE aims to develop petroleum exploration and to make the industry more globally competitive. Last November, it launched the Philippine Conventional Energy Contracting Program (PCECP), DoE’s revised petroleum service contract mechanism wherein potential investors may bid for exploration projects.
The PCECP has offered 14 pre-determined areas for exploration located in Cagayan (one area), East Palawan (three areas), Sulu Sea (three areas), Agusan-Davao (two areas), Cotabato (one area), and West Luzon (four areas). Interested applicants could also nominate their areas of interest.
“[W]e deem it our priority for local exploration to flourish as we are driven to make sure that the demand for energy is met,” Energy Secretary Alfonso G. Cusi was quoted as saying during the launch of the PCECP. “We see that the program will offer positive contributions to our economy as a direct result of exploration-related investment.”
Prior to PCECP, petroleum exploration initially advanced when President Rodrigo R. Duterte signed the service contract for petroleum exploration covering Area 4 of Eastern Palawan, which is awarded to Israeli firm Ratio Petroleum Ltd.
“We are currently experiencing how our dependence on importation has left us at the mercy of price movements in the global oil markets. We need to boost the exploration and development of our own energy resources and the awarding of the petroleum service contract to Ratio Petroleum is a step in the right direction,” Mr. Cusi said in a statement.