February 26, 2024

Around 50 local and international oil and gas exploration and production companies, including those foreign companies operating in the country, attended and shown interest in participating in the bidding for coal, petroleum, and native hydrogen exploration and development in the Philippines and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

At the launching of the 1st Conventional Energy Bid Round for BARMM, Undersecretary Leo Angelo M. Larcia of the Department of Budget and Management (DBM) and Director General Mohajirin T. Ali of the Bangsamoro Development and Planning Authority (BPDA), representing Secretary Amenah F. Pangandaman of the DBM and Minister Mohagher M. Iqbal of the Bangsamoro Ministry of Basic, Higher and Technical Education (MBHTE), respectively, along with Energy Secretary Raphael P. M. Lotilla and Minister Akmad A. Brahim of the Bangsamoro Ministry of Environment, Natural Resources and Energy (MENRE) jointly unveiled four (4) Pred-Determined Areas (PDAs) for coal and petroleum exploration in the BARMM. 

The sole PDA for coal exploration is located in Kapai and Tagoloan, Lanao del Sur covering a total area of 14,856 hectares. Meanwhile, for the 3 PDAs for petroleum exploration, PDA-BP-1 encompasses Cotabato City and the provinces of Lanao del Sur, Maguindanao del Norte and Maguindanao del Norte. The area covers 229,240 hectares and is situated in the Cotabato Basin. Petroleum exploration in the basin dates back to the presence of oil in a water well drilled in Datu Piang, Maguindanao del Sur in 1916. A total of 14 wells have been drilled in the area, 10 of which had oil and gas shows.

The PDA-BP-2 and PDA-BP-3 are both situated in the Sulu Sea Basin with areas of 780,000 hectares and 532,083 hectares, respectively. To date, six wells have been drilled within PDA-BP-2, of which three are gas discoveries, and one with oil and gas shows. On the other hand, seven wells were drilled within PDA-BP-3, of which four had gas shows, and one had oil and gas shows. 

For the 2024 Philippine Bid Round, two (2) PDAs located in Northwest Palawan and Southern Cebu are offered for the development and production of petroleum. The Offshore Northern Palawan or PDA-DP-1, 60 km off the northern coast of Busuanga Island, covers 100,000 hectares. It includes five wells, which led to the discovery of the Calauit and Calauit South oil fields, with an estimated reserve of 5.5 to 6.1 million barrels of oil (MMbbls). Recent studies of the area also revealed additional prospects ranging from 0.1 to 1.8 MMbbls of oil.

In the Visayan Basin, or PDA-DP-2, is a well explored area in Cebu, with multiple surface geology, seismic, and well reports. The area covering 58,638 hectares has estimated resources of 26.3 to 31.9 MMbbls of oil, with favorable amounts of gas appearing in other exploratory wells. Recent production from six wells in the block, which produced 19,791.26 barrels of crude oil from 2018 to 2023, is located in the municipality of Alegria.

Meanwhile, two (2) PDAs for native hydrogen exploration adjacent to the northern portion of the Zambales Ophiolite Complex and the western portion of Central Luzon were also offered. PDA-PH-1 located in the provinces of Zambales and Pangasinan covers an estimated 134,096 hectares. On the other hand, PDA-PH-2 located in the provinces of Zambales and Pangasinan, covers an estimated 96,439 hectares.

Several studies revealed that native hydrogen forms primarily in two (2) major geologic environments. These include Precambrian crystalline shields and serpentinized ultramafic rocks within land-based ophiolites, the latter of which is abundant in the Philippines. 

The Philippines has nine (9) ophiolite belts, several of which showcased gas seeps. Of these areas, the Zambales Ophiolite Complex is deemed to be the most promising location for native hydrogen exploration, being home to serpentinized ultramafic rocks.

DOE Undersecretary Alessandro O. Sales said the DOE will select applicants who can demonstrate a good understanding of the possible resource potential of these areas and will carry out a work program that will efficiently map and test the potential. Applicants must have experience from exploration and field development in similar areas and the necessary risk capital and financial capability to explore and develop.

Companies may already submit their Petroleum Service Contract (PSC) application within the prescribed 180-day application period, while Coal Operating Contract (COC) applications may be submitted within the 60-day application period following the publication of the Pre-Determined Areas for offer today, 26 February 2024. The issuance of Notices of Qualification for BARMM COCs shall be announced on 24 July 2024, and on 21 November 2024 for BARMM PSCs. The Notices of Qualifications for development and production of petroleum, and hydrogen exploration shall be announced on 24 September 2024.

“We are very pleased that known oil and gas exploration and production players in Asia, North America, and Europe, including local players, have come to this event and displayed a keen interest in evaluating our country’s petroleum potential,” Undersecretary Sales said.

“I encourage you to further evaluate these petroleum potentials. We have the best contractual terms to offer that could match and compete with other countries,” Undersecretary Sales added. ###