The Department of Energy (DOE) will propose incentives for upstream activities to spur investor interest in oil and gas exploration in the Philippines.
“We need to revitalize exploration, which has been stagnating for the past decade and a half. Without exploration, there will be no new discoveries or developments. We’ve identified and addressed several gaps that have impeded exploration, primarily through policy changes,” DOE Undersecretary Alessandro Sales said at the forum on investment opportunities in the Philippines organized by the Energy Council and Rystad Energy.
Sales said the department was working on a draft circular that proposes special allowances for interested industry players.
These include the proposed enhanced cost recovery allowance which allows for the use of unutilized cost recovery from one service contract to offset costs in others, with a cap of 70 percent.
He said the DOE would also propose a marginal field allowance to support brownfield and stranded small reserve operations, aiming to extend the life of existing facilities and encourage their repurposing.
Sales said they also plan to introduce the new play allowance which incentivizes the exploration of “new plays”, such as stratigraphic plays in Palawan, which have not been drilled yet.
He said the DOE would also propose a frontier area allowance for targets areas with no existing facilities and long distances to market, encouraging exploration in previously neglected basins.
“We plan to open this draft circular for public consultation before the end of September. Details on the allowances are still being finalized, and we will update stakeholders accordingly,” Sales said.
He said there are about 16 petroleum service contracts in the Philippines, predominantly in northwest Palawan.
“Recently, we’ve awarded contracts in the east of Palawan and are evaluating applications for new areas. Our goal is to increase upstream activities by 2025,” Sales said.
“We are eager to see new developments and are optimistic about the future of energy in the Philippines,” he said.
Be the first to comment