Dennis Uy, MVP eyeing oil exploration deals in West Philippine Sea
Metro Manila (CNN Philippines, September 14) — Tycoons Manny Pangilinan and Dennis Uy are looking to explore areas in the West Philippine Sea for oil deposits, the Department of Energy revealed Monday.
The agency opened bids for four nominated areas under its Philippine Conventional Energy Contracting Program, which covers possible petroleum deposits near Recto Bank, an area subject of the country's territorial row with China.
Uy's Udenna Corporation submitted bids for nominated areas 7 and 8 identified by DOE. The area is also called Reed Bank, an oil-rich sea feature within the Philippines’ 200-nautical mile exclusive economic zone that China is also claiming despite the ruling of an international arbitral tribunal which negated Beijing's sweeping claims.
Pangilinan's PXP Energy applied for Area 6, which covers a different section in the disputed waters. All bids were found compliant with the DOE's legal, technical and financial requirements. Its subsidiary, Forum Energy, holds the rights to drill the adjacent area under Service Contract 72, which it secured in 2012.
This was put on hold as the government is now looking into a joint oil and gas exploration deal with China in the disputed waters. However, the two camps have yet to finalize rules on how they will carry out the new agreement.
READ: PH-China joint oil, gas exploration a win-win solution to South China Sea dispute – Carpio
Meanwhile, the bid submitted by Troika Giant Power Corporation for Nominated Area 5 covering the Mindoro-Cuyo Basin also passed this stage. Bids are charged ₱200,000 per area.
Following the acceptance of application documents, the DOE will then review a company's qualifications before it is chosen as the area contractor and is awarded a petroleum service contract by President Rodrigo Duterte, according to DOE guidelines.
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Uy has been aggressively expanding his fuels business, having begun with his retail brand Phoenix Petroleum. In October 2019, he signed a deal with Chevron Philippines which allowed him to take a 45 percent stake in the Malampaya consortium, which extracts fuel reserves off Palawan province.
Pangilinan's PXP Energy was also eyeing Malampaya and offered to take over the operations of the gas facility, but was rejected by DOE.
The search for additional oil reserves proves crucial for local supply. Energy Secretary Alfonso Cusi earlier said back that the Malampaya reservoir – which is located near Recto Bank – is only good until 2027.
READ: Duterte considers lifting moratorium on South China Sea explorations
Once the petroleum exploration and production contract expires in 2024, full control and ownership of the Malampaya natural gas and oil facilities will be turned over to the national government.
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