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PHilMech’s seeder prototype may boost onion farm income

MUÑOZ, NUEVA ECIJA — The Philippine Center for Postharvest Development and Mechanization (PHilMech) is hoping its 10-row onion mechanical seeder (10-ROMS) prototype will make farm operations more efficient and cost-effective.

“Onion farmers are faced with high seed and labor cost and the 10-ROMS seeks to address these problems,” PHilMech Science Research Specialist Domingo R. Miranda said in an interview at PHilMech’s demonstration area in Science City of Muñoz.

The 10-ROMS, which rides on a two-wheel tractor and requires one person to operate, is capable of discharging seeds at a predetermined rate, opening the furrow to the required depth into which the seed is placed, and dragging loose soil into the furrow to cover the seed after placement.

Farmers usually plant onion through direct seeding or transplanting, which are labor-intensive and more costly.

Mr. Miranda also explained that transplanted onions take four months to harvest, which increases the risk of exposure to pest and diseases. He said this was the experience of farmers who tried to plant onion in Bukidnon and General Santos City.

“The 10-ROMS does not only plant onions more efficiently but compared to the transplant method, it allows the onions to mature at a rate of 10-14 days, faster so the exposure to rain, pest and diseases is reduced,” he said.

Manual direct seeding, on the other hand, is capital-intensive as it utilizes more onion seed at 20-25 cans per hectare, and this method has been observed to be less productive compared to the methods practiced in other countries.

“PHilMech’s onion mechanical seeder expedites farm operations and effectively increases farm productivity through efficient seed distribution (at 11 cans per hectare) and maximize plant density per unit area,” Mr. Miranda said.

Farmers in Bongabon, Nueva Ecija, one of the country’s major producers of onion, have complained of high labor costs using the transplant method. They have also tried the direct seeding method using two-row equipment, which requires three operators, one to guide the machine and two to pull it across the field.

Mr. Miranda said onion farmers usually contend with labor shortages during the peak season for planting.

“Compared to the broadcasting (manual) method of direct seeding, the use of 10-ROMS can generate additional income of P60,839 per hectare due to the increased yield and reduction in cost of seed,” he added.

The cost of putting together the 10-ROMS prototype was P70,000, Mr. Miranda said, but they are counting on mass production to bring the price down. — Carmencita A. Carillo

Germans ditch pork as consumers go vegetarian

THE NATION that gave the world Bratwurst and hot dogs is cutting back on its favorite pork sausages and larding up plates with more veggie concoctions instead.

Germans last year consumed the smallest amount of pig meat since at least 2005, and the drop will continue in 2017, according to Agriculture Market Information Co. in Bonn. In Europe’s largest hog-producing and pork-eating nation, ham and sausage demand has dropped for at least three straight years.

Pork still accounts for more than half the meat eaten in the continent’s top economy, but it’s losing market share to poultry and beef and competing more with vegetarian options at shops and restaurants. The shift reflects changing German attitudes about healthier diets and climate-friendly, sustainable food production. There’s also been an influx of refugees who don’t eat pork.

“While there continues to be a lot of appetite for pork dishes, we adapt our menu,” said Christoph Wagemann, the head of procurement and controlling at the 167-year-old Zum Schluessel beer hall in Dusseldorf’s old town, which now serves a vegan “chili con soja” along with traditional meat sausages. “Bigger groups will always have vegetarians or vegans.”

Pork has a long history in Germany, which even boasts an entire museum dedicated to Currywurst — a cheap Cold War-era sausage that mixes meat with spiced ketchup. Domestic sausages come in more than 1,500 regional varieties, a vast majority of which are made with pork, according to the German Butchers’ Association.

EATING LESS
Total pork consumption in Germany has plunged 10% since 2011, to about 2 million tons last year, according to data compiled by researcher Euromonitor International. Over the same period, demand has increased in neighboring Poland, France and Austria.

On average, Germans ate about 36.2 kilograms of pork each last year, down from 40.1 kilos in 2011 and the lowest since AMI began tracking the data. The decline was so steep that it exceeds the increases for poultry and beef, which means overall meat consumption in the country dropped to 60 kilos, the lowest since 2006.

With consumers less enamored with pork, even traditional sausage makers are offering veggie options. The 183-year-old Ruegenwalder Muehle Carl Mueller GmbH & Co. KG now produces veggie schnitzels, hams and sausages such as a pea-protein Leberwurst, which is normally made of pig liver.

The family-owned company in Bad Zwischenahn, Lower Saxony, the heart of the German pig industry, says its meat sales fell 5% last year. But vegetarian and vegan products jumped by a third, accounting for 26% of total revenue. By the end of the decade, non-meat offerings should reach 40%, a company spokeswoman said.

Food companies also are making more ready-to-cook meals such as curry that use more chicken or beef, which is crowding out pig meat, according to Justin Sherrard, animal-protein strategist at Rabobank in Utrecht.

These days, one in 10 Germans shuns meat, up from less than one in a 100 more than a decade ago, the German Vegetarian Union estimates. More than 200 vegan cookbooks were published in Germany last year, almost double a year earlier, the Berlin-based vegetarian association estimates. The domestic meat-substitute market has grown on average almost 25% in the past five years, according to Euromonitor.

ANIMAL WELFARE
The appeal of pork has been hurt by recent animal-welfare scandals and disclosures that farmers raise pigs in confined spaces of less than a square meter. Almost 60 million pigs are slaughtered annually in Germany, mainly in Lower Saxony and North Rhine-Westphalia, according to the government statistical office. There also are increased concerns about processed meat after the World Health Organization categorized ham, sausages and hot dogs as carcinogenic.

“Pork has a bad reputation in Germany,” Matthias Kohlmueller, a livestock-unit manager at AMI, said by phone from Berlin. “Consumption is not growing.”

Environmental issues also play a role. Livestock generates about 14% of human-made greenhouse-gas emissions, the United Nations’ Food & Agriculture Organization estimates. Germany’s Environment Ministry no longer serves meat and fish at its functions “to set a good example as vegetarian food is more climate-friendly,” said spokeswoman Nina Wettern.

Another big influence on demand is the change in German demographics and eating habits after the arrival of about 1 million refugees. Most of the people who sought asylum came from Muslim countries where they don’t eat pork for religious reasons, including Syria and Afghanistan. That boosted sales of lamb, mutton and goat to an eight-year high in 2016, according to Euromonitor. More public canteens and schools have also been removing pork from menus.

There are attempts to address public concerns. German Agriculture Minister Christian Schmidt is seeking to establish a state animal-welfare label, including a premium degree. He has called for reinstating pork on school menus and has commissioned experts to make general proposals for “balanced daycare and school food.”

Meanwhile, in Dusseldorf, Peter Zodrow runs a vegan eatery that has seen its business boom. When he opened a decade ago, Zodrow was serving 50 guests a day and could hardly break even serving vegetable stews and curries. Today, the 48-year-old animal-welfare activist serves 1,000 customers daily at four branches in North Rhine-Westphalia.

One customer, Daniel Klager, 32, said he eats at the restaurant for ecological and animal-husbandry reasons. “I want to ease the climate situation a bit by my consumer choices,” he said at Zodrow’s eatery, called Sattgruen, which means “saturated green” in German. — Bloomberg

Australia enters medical marijuana market

AT a secret location in Australia’s southeast, Peter Crook delicately tends to a two-month-old cannabis cutting.

Barely knee high, it is one of about 50 government-sanctioned “mother plants” to be cloned for future generations of crops for the country’s fledgling medicinal marijuana industry.

“I think we’ll see Australia punch above its weight, both in agriculture research as well as medical technology,” says Crook, the chief executive of Cann Group Limited, the firm granted Australia’s first commercial grower’s license.

“As different conditions come online we are going to see the market grow rapidly.”

Following Canada, Israel, and more than half the US states, who through varying approaches have legalized medicinal marijuana, Australia has signaled its intention for a homegrown industry.

But a patchwork of regulations that guard access for many desperate patients, and a lack of confidence among doctors in prescribing the drug, are acting as impediments.

While recreational marijuana use remains illegal in Australia laws passed last year permit medical use, with a dozen licenses since issued, ranging from cultivation and research to manufacturing.

At least 10 sector-related firms have listed on Australia’s stock exchange, while tens of millions of dollars has been pledged for clinical trials investigating treatment for conditions including epilepsy and relief for the terminally ill.

Driven by a growing recognition of treatment for chronic pain, arthritis and migraines, the global market is estimated to reach $55.8 billion by 2025 with the US, Canada and Israel leading the way, US-based analyst Grand View Research says.

But unlike those markets, which have liberal patient-access, Australia has a “very conservative government” that wants a regulatory framework in place up front, says Adam Miller, founder of medical cannabis start-up BuddingTech.

“They’re doing things by the book so that when they have the evidence required to satisfy not only Australia’s but other countries’ governments, and medical bodies, they will be able to export those products to those countries,” he added.

Last year, researchers at the University of Sydney estimated a legal domestic medical market would initially be worth more than Aus$100 million ($75 million) a year.

Miller, who was drawn to the industry after researching alternatives for his seriously-ill mother, says unlocking the local market requires easing patient access and educating doctors.

But not at the expense of the pharmaceutical industry’s integrity.

“Any new products that are going to be distributed to a large number of patients need to go through the same mechanism that any other drug would go through, and cannabis is no different,” he says.

Doctors acknowledge the plant’s potential in palliative care, epilepsy and spasticity but remain guarded in its broader use, citing limited scientific proof.

“It’s been around since pre-history and if it was the panacea for a whole range of medical conditions it was claimed to be by some advocates, then we would have been using it for a long period of time,” says Australian Medical Association president Michael Gannon.

But for many, change is too slow.

Arielle Harding had her first epileptic seizure at 15-months-old. Suffering from about 100 a day, treatment with traditional drugs made things worse.

Her desperate parents recently tried small doses of Cannabidiol, or CBD, a non-psychoactive marijuana derivative in liquid form and Arielle, now five, shows few signs of her condition.

“At first we were just overjoyed that had happened but you also find that you get pretty angry pretty quickly, when you realize that we could have had this three years ago and what a difference that would that have made,” her father Tim recalls.

The legal CBD oil he purchases is not an elixir, but like thousands seeking cannabis treatment in Australia, Harding says he is unable to explore the drug further for fear of breaking complicated laws.

A 2015 Roy Morgan poll found more than 90% of Australians support legalizing marijuana for the seriously ill, but advocates say it struggles for recognition because of its “demonized” past.

“It is really important to realize that you can get the medicinal benefits from cannabinoids without necessarily being intoxicated,” says Iain McGregor, academic director at the University of Sydney’s cannabis research hub.

“We can actually pull apart the intoxicating recreational effects from the therapeutic effects, and again that allows doctors to prescribe with more confidence if it is a non-intoxicating cannabinoid.”

As attitudes change, encouraging more research, McGregor is optimistic about the plant’s potential “to produce incredible therapeutics for a whole range of diseases that are currently very difficult to treat.” — AFP

SMC eyes venture into electronics manufacturing

DIVERSIFIED conglomerate San Miguel Corp. (SMC) is now looking at expanding into electronics manufacturing, as it sees continued growth in demand for smartphones and other electronic devices.

“Nine years after our diversification, (it has been) very successful. So the next phase has to go into that third phase of our business which is to go into the next generation of electronics microchips,” SMC President and Chief Operating Officer Ramon S. Ang told reporters after the stockholders’ meeting of Top Frontier Investment Holdings, Inc. on Wednesday in Pasig City.

Top Frontier is the largest stakeholder in SMC with a total share of 66.14%.

Originally a food and beverage company, SMC started diversifying its portfolio in 2008, with forays into infrastructure, energy, and fuel and oil.

“Ang diversification ng SMC magandang-maganda na. Tingnan mo ’yung Petron, oil refinery, petrochemical. Maganda na takbo, pati power business, infrastructure, tollway… gumaganda na. So next business ano ba maganda na malaki ang margin, malaki ang demand sa mundo?… Microchips, electronics,” Mr. Ang said.

The tycoon cited the electronics business of South Korean giant Samsung Group as an example.

“The third wave of expansion, if we can convert San Miguel into the next generation of electronics, similar to that of Samsung — microchips, tablets, smartphones, smart televisions. That’s our aspiration, how to go into the next one,” Mr. Ang said.

However, Mr. Ang declined to give a timetable for the electronics manufacturing venture, but noted this will be another leg of growth for the company.

By 2020, SMC targets to triple its net income to P150 billion, as it sees the completion of major tollway projects and finalizes payment for the purchase of three power plants.

Earnings of the conglomerate soared to P52 billion in 2016, 80% higher than the P28.99 billion it delivered a year ago.

For the first quarter of 2017, SMC netted P13.82 bilion, 2.13% higher than its earnings of P13.54 billion in the same period in 2016.

NICKEL PROCESSING
Mr. Ang also said that Top Frontier will be finishing the feasibility study for its $1.5-billion nickel processing plant by the end of this year. The plant, located in its Nonoc nickel mind in Surigao del Norte, will be able to produce 200,000 tons per year.

“’Pag natapos dun, then ’yung technical and financial study, ’pag okay ’yung feasibility. Then we will go for financing,” he said.

While the company is banking on the feasibility of the project, Mr. Ang said they are concerned about the sensitivity of global nickel prices.

“Titingnan ’yung sensitivity, at low price kung kumikita ’yun then tuloy,” he added.

On Wednesday, shares in Top Frontier closed 20 centavos or 0.07% lower from the previous trading day to P303 apiece, while San Miguel shares fell 30 centavos or 0.29% to close at P103 apiece. — Arra B. Francia

Apo Agua faces new hurdles in Davao bulk water project

By Carmencita A. Carillo,
Correspondent

DAVAO CITY — Apo Agua Infrastructura, Inc. (AAII), a joint venture between Aboitiz Equity Ventures, Inc. and J.V. Angeles Construction Corp., is facing a setback in its P10-billion bulk supply project here as the city council has returned the proposal to the committee level after the community at the water source filed a protest.

“One of the reasons the bulk water project was remanded to the committee level is because of the protest of Barangay Tamugan with the National Water Resources Board (NWRB),” Councilor Rene Elias C. Lopez, chair of the committee on housing, rural and urban development, said in an interview.

Officials of the barangay, in their letter to the NWRB, questioned the right of the Davao City Water District (DCWD), which will buy and distribute the bulk supply from AAII, to transfer its extraction rights to the private firm.

They pointed out that such transfer can only be granted by the NWRB. The community officials also questioned the share of the barangay in the project as well as the corporate social responsibility program that will be implemented by AAII.

Mr. Lopez added that there are several other issues that need to be settled at the committee level before the proposal can be forwarded again to the council plenary.

Among these are the impact on water rates and the supposed failure to consult the council’s committee on environment given that the planned water source, the Tamugan River, is classified as a watershed area under the city’s land use and zoning ordinance.

“We can’t help but raise questions like, why is it allowed in a protected area and do we need to violate the city’s land use plan? We did not get any endorsement for the project from the DENR (Department of Environment and Natural Resources) or Malacañang on the necessity of the project,” Councilor Diosdado A. Mahipus, environment committee chair, said in a separate interview.

The project, which involves an exclusive supply contract with DCWD for 300 million liters of water per day for 30 years beginning 2019, was cited by the National Economic and Development Authority’s Davao Region office in 2015 as one of the crucial projects for development.

AAII earlier said it already acquired its environmental compliance certificate (ECC) from the DENR-Environmental Management Bureau in Region 11 last March.

In an interview with BusinessWorld in June, AAII General Manager Cirilo C. Almario III said they aim to start construction on the project by the fourth quarter this year. This is already months behind the original January 2017 target, but he remained optimistic of completing the project despite various pending government permits and documentary requirements, including the city council approval.

Mr. Mahipus said the company’s request for a permit to use the watershed area requires at least a 3/4 vote at the council because it is tantamount to amending the city’s zoning ordinance.

“I will insist that the city should be a joint venture partner in the bulk water system supply because after all it is our resources,” he added.

Mr. Lopez, on the other hand, said while he welcomes the stand of Mr. Mahipus to make the city part of the joint venture, he believes that the AAII request only involves the allowable use of the area.

“The water treatment facility is not allowed under the zoning ordinance of 2013 as it is an agricultural area, but they cited Section 12 which says it can request for another use of the land aside from what it has originally been zoned for following the stringent requirements,” Mr. Lopez said.

The project includes a weir, a hydropower plant, and pipelines of about eight kilometers going to the water treatment facility. A 55-kilometer network of supply lines will also be rolled out towards the eight existing reservoirs of DCWD, which will then be able to shift its main water supply source to surface water from the current ground water.

Lepanto to start production from copper-gold project in 3rd quarter

LEPANTO Consolidated Mining Company on Wednesday said it will start production from its Benguet copper-gold project in the third quarter of 2017.

In an e-mailed statement, Lepanto said on-going drilling revealed previously unrecognized gold-bearing vein systems, comprised of quartz, pyrite and gold (QPG), in five areas of its copper-gold project located next to its Victoria gold project in Mankayan, Benguet.

“The QPG veins will have a very positive impact on future gold production,” the mining firm said.

With this findings, Lepanto said it will commence production from the copper-gold project in the third quarter.

“For this purpose, the copper flotation plant is presently being debugged. Initial combined ore throughput from the Victoria and the Copper-Gold Project is estimated at 1,500 tons per day, ramping up to 3,000 tons per day by 2019,” it added.

Also, Lepanto said “new significant” porphyry copper-gold systems were also discovered during drilling.

“The potential for significant deeper mineralization is indeed exciting and additional drilling is planned to fully test the porphyry style of mineralization,” it said.

Lepanto started exploration in October 2015 and has so far completed 41,000 meters of underground drilling to evaluate the copper-gold project resources at the former enargite mining area.

The firm has discovered combined indicated and inferred resources of 6.67 metric tons (MT) with a copper grade of 0.99 % Cu and gold content of 2.16 gram per ton.

On-going drilling has since identified additional resource of 7.90 MT at 1.69% copper grade and 2.07 grams per ton of gold.

Shares in Lepanto went up 1.56% to close at 19 centavos apiece on Wednesday. — Janina C. Lim

China’s biggest wind-turbine maker inks deal in PHL

XINJIANG Goldwind Science & Technology Co., China’s biggest wind-turbine maker, is expanding its footprint abroad with new deals in the Philippines and Australia.

During the second quarter, Goldwind and Shanghai Electric Power Design Institute Co. signed a turbine supply agreement for the 132-megawatt Pasuquin wind farm in the Philippines, the first deal for a Chinese turbine maker in the market, unit Goldwind International Holdings (HK) Ltd. said in an e-mailed report.

Goldwind in May agreed to buy the Stockyard Hill wind farm in Australia’s Victoria state from Origin Energy Ltd. The project has planned capacity of 530 megawatts.

The deals come as turbine orders in China fall as growth slows. Goldwind International said it has signed contracts for almost 2 gigawatts outside China as of the end of June.

Last month, Goldwind reached an in-principal agreement with Aurora Energy Pty to build a 144-megawatt wind farm at Cattle Hill in Tasmania’s Central Highlands, according to the report.

Goldwind also presented its new 3-megawatt platform to its key clients in Africa in May, the unit said. — Bloomberg

How PSEi member stocks performed — July 12, 2017

Here’s a quick glance at how PSEi stocks fared on Wednesday, July 12, 2017.

Smart expands free Wi-Fi service in more LRT stations

SMART Communications on Wednesday said it has expanded the coverage of its free Wi-Fi service to five more Light Rail Transit Line 1 (LRT-1) stations.

In a statement, the PLDT wireless subsidiary said LRT commuters can now have access to high-speed Wi-Fi connectivity at the Abad Santos, Pedro Gil, Gil Puyat, UN Avenue, and R. Papa stations.

This is in addition to the Doroteo Jose station, which already has carrier-grade Smart Wi-Fi since February.

PLDT Smart Senior Vice-President and Head of Enterprise Juan Victor Hernandez said Smart is continuing to roll out its Wi-fi service in high-traffic areas, including 13 stations of the Metro Rail Transit Line 3 which has already been completed.

“As our nationwide rollout of #SmartWifi goes on full swing, this deployment along the LRT-1 is yet another step forward in our efforts to make world-class Internet connectivity accessible to more and more people,” he was quoted as saying in a statement.

All mobile network subscribers and users of Wi-Fi capable devices can avail of 30 minutes of free Internet without a data cap using the Smart Wi-Fi service.

Smart is looking to complete its public Wi-Fi installation in all LRT-1 stations and the corresponding street level stretch by the end of the year.

The wireless unit is also committed to strengthening its 2G, 3G and 4G coverage in the entire stretch of LRT-1, as well as in Metro Manila’s major transport terminals and railways.

“These are all aligned with our efforts to improve the commuting experience in the Metro. These are also opportunities for us to let the public reap the benefits of our network modernization program — specifically our Smart Wi-Fi and our LTE rollouts,” Mr. Hernandez said.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.

Signage firm offers to buy Metro Alliance

A LOCAL SIGNAGE manufacturing firm is looking at a potential backdoor listing via Metro Alliance Holdings & Equities Corp., as it expressed interest in acquiring a majority stake in the dormant listed company.

Metro Alliance disclosed on Tuesday that it received a letter of intent from Vynex Signs Philippines, Inc. detailing its plan to purchase a majority stake in the firm.

Vynex Signs was established in the Philippines in 1993 as a signage manufacturing company, and now offers large format printing.

Metro Alliance said the transaction will be subjected to a decision from both parties on a “mutually agreeable share price,” a due diligence review of its financial accounts and operations, as well as the lifting of the trading suspension.

Trading of Metro Alliance shares has been suspended since May 17, 2007, with the final close at 70 centavos each. The company’s market capitalization is currently at P128.57 million.

Incorporated in 1929 as Marsman & Company, Inc., Metro Alliance’s business includes contract logistics and supply chain management services through unit Metro Combines Logistics Solutions, Inc. It also engages in third party warehousing and distribution, consultancy and project management and value added services to customers throughout the Philippines.

For the first quarter of 2017, the company posted a net income of P8.81 million, almost tripling its earnings in the same period a year ago of P3.3 million. — Arra B. Francia

DoE weighs offers from 5 countries for LNG plant

By Victor V. Saulon, Sub-Editor

THE Department of Energy (DoE) has listed five countries that have shown “great interest” in participating in the government’s plan to build an integrated facility for liquefied natural gas (LNG), which it targets to finish during the current administration.

“These are the countries that have shown great interest in the project — Japan, China, Russia, South Korea, and Indonesia,” Energy Secretary Alfonso G. Cusi told reporters on Wednesday on the sidelines of the DoE’s launch of an information campaign called “E-Power Mo” at the Philippine International Convention Center.

“It doesn’t mean that we have shortlisted,” he said. “We are evaluating all the proposals.”

He said he would be meeting on Friday with the Philippine National Oil Co. (PNOC) board of directors “for management to present all these proposals so we can properly evaluate them.” He chairs the board of PNOC, a government agency that has become aggressive in making its assets more commercially viable.

Last month, Mr. Cusi said the DoE was planning the construction of a common receiving and distribution infrastructure for LNG, considered the “cleanest” of all fossil fuels, that is aimed at making the country a hub for the energy resource in Southeast Asia. The facility is planned for a property in Batangas owned by PNOC.

Mr. Cusi previously said the facility would cost around P100 billion and targeted for completion by 2020, which should give the country enough lead time ahead of the anticipated depletion of the Malampaya natural gas find starting in 2024. The offshore Palawan platform supplies gas to several power plants in Batangas. It powers up to 20% of the country’s electricity requirements.

He had said the facility would have an initial 200-megawatt (MW) power plant storage facilities, liqeufaction and regasification units. The plant’s output is aimed to served the country’s economic zones, he added.

Asked when the DoE and PNOC will shortlist project proponents, Mr. Cusi said yesterday that the decision might come after the discussions on Friday. He said the choice could be just one proponent or a consortium.

“This is a project that is a bit complex,” he said, citing the need to find expertise in technical, trading and management solutions.

He said that once a proponent is chosen, he expects the project to break ground in early 2018. He cited two major outcomes that the DoE is targeting to achieve with the project.

“Number one, as a substitute to the Malampaya gas when it is depleted.” he said. “Number two, is we would like for the Philippines to become the hub for LNG.”

The project will allow the country to import LNG, which is transported from other countries in liquid form, then converted back to gas ahead of its use in a proposed power plant.

With its location, the Philippines is strategically located to become an LNG hub and complement activities in Japan and Singapore, Mr. Cusi said, adding that the project could bring economic growth in the country.

“But definitely we want to complete it within the term of [President Rodrigo R.] Duterte,” he said.

The DoE’s “E-Power Mo” campaign aims to make energy issues understandable to ordinary consumers.

New oil and coal contracting round to cover 4.8-M ha. prospecting area

A NEW contracting round is in the works for petroleum and coal, the Department of Energy (DoE) said on Wednesday, in a move that the agency hopes to create wealth for the industry to fund more energy development projects.

“We will be conducting the energy contracting program for petroleum and coal, and we are targeting December as our launching month. So hopefully we’ll be discovering additional reserves,” said Ismael U. Ocampo, assistant director of the DoE’s energy resource development bureau (ERDB).

He made the statement during a press conference to launch the department’s information campaign called “E-Power Mo” at the Philippine International Convention Center.

Mr. Ocampo said the program would be the sixth Philippine Energy Contracting Round, a competitive system of awarding service contracts for petroleum and coal prospecting areas.

During the press conference, Undersecretary Felix William B. Fuentebella described ERDB as “the bureau that creates wealth for all of us. “If the bureau discovers something” the energy resource development fund becomes bigger, he added.

“As far as the moratorium (in disputed areas) is concerned, we have always deferred to the DFA (Department of Foreign Affairs). In the conduct of this [contracting program] it will be subject to clearance from the DFA,” he said.

Mr. Ocampo said he hopes the new contracting program will discover another Malampaya, referring to the offshore Palawan gas find that supplies a number of power generation plants in Batangas that deliver about 20% of the country’s electricity requirements. The government receives a portion of the revenue from the project.

He said the areas to be offered under the new contracting program include parts of the West Philippine Sea, Sulu sea and areas around Palawan province. In the fifth round the DoE offered 11 areas with a total scope of about 4.8 million hectares.

Mr. Ocampo expects issues in the past contracting rounds to be resolved, including the lifting of a moratorium on oil exploration in parts of the West Philippine Sea. The ban was imposed by the DoE as some contract areas fell within the scope of the arbitration case filed by the Philippines against China.

On July 12, 2016, the Permanent Court of Arbitration in The Hague in the Netherlands ruled that Reed Bank is within the Philippines’ exclusive economic zone as defined under United Nations Convention on the Law of the Sea.

Mr. Ocampo said he expects the moratorium to be lifted before December. He said he received information that the DFA was drafting a “directive” instructing the DoE to resume oil and gas exploration in the West Philippine Sea.

He said the department will try to conduct seismic tests in the area and if China does not complain, then exploration might proceed. He said Filipino fishermen in the area were able to fish unhampered. He said he would be following up with the DFA on the status of its directive. — Victor V. Saulon

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