Cotabato City - The Department of Energy (DOE) and the Ministry of Environment, Natural Resources, and Energy (MENRE) are pleased to announce the awarding of the 1st Coal Operating Contract (COC) for a Pre-Determined Area (PDA) in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). This contract, awarded to Filipinas Systems, Inc. (FSI) for coal exploration in Kapai and Tagoloan II, Lanao del Sur, represents a significant milestone in BARMM’s energy development.
The awarding ceremony took place today, 24 October 2024, at the Office of the BARMM Chief Minister, Bangsamoro Government Center in Cotabato City. The event was attended by BARMM Chief Minister Ahod Ebrahim, Energy Secretary Raphael P.M. Lotilla, and MENRE Minster Akmad A. Brahim. The event highlights the National Government’s continued support for BARMM’s economic growth and energy self-sufficiency under the administration of President Ferdinand Marcos Jr., solidifying a partnership that will shape the region’s energy landscape for years to come.
This achievement stems from the landmark co-signing of the Intergovernmental Energy Board (IEB) Circular in July 2023, by Secretary Lotilla and Minister Brahim. The Circular laid the foundation for a collaborative framework between the National Government and the Bangsamoro Government, enabling the joint awarding of Petroleum Service Contracts (SCs) and COCs within the BARMM. This framework is a historic step toward BARMM’s energy independence, setting the stage for the responsible exploration and development of local energy resources, while paving the way for enhanced energy infrastructure and economic opportunities in the region.
“The awarding of the 1st COC in BARMM is a landmark moment for both governments. It reflects our collective commitment to advancing energy development and resource management in the region, empowering the BARMM to play a key role in the country’s energy future. This partnership will not only foster energy independence for the Bangsamoro region but also create pathways for sustainable economic growth and development,” Secretary Lotilla said.
He also explained that the development of fossil fuels like petroleum, gas and coal are jointly administered by the National and BARMM governments. Renewable energy sources other than hydro power from Lake Lanao are within the BARMM’s jurisdiction. But the national government and DOE are committed to assist the BARMM in every way to tap its solar, wind, geothermal and other renewable energy sources.
More than 80 percent of the country’s coal requirements are imported from abroad. Any domestic sources of coal will lessen dependence on foreign sources. Currently, 98 percent of the country’s coal imports are from Indonesia.
Under the terms of the coal service contract, FSI has committed to investing around PhP19 million in its two-year exploration work program. Additionally, once converted to development and production stage, FSI will provide PhP150,000.00 annually in scholarships to qualified individuals from the contract area, supporting local communities.
The company has also pledged to pay the following to be shared equally between the DOE and the MENRE: a) PhP250,000.00 signature bonus; b) PhP250,000.00 development assistance; and c) PhP75,000.00 annually for training during the exploration period increasing to PhP200,000.00 annually when converted to development and production stage.
The signing of the IEB Circular in July 2023 marked a turning point for energy governance in the BARMM, formalizing a framework for collaboration that ensures both governments actively participate in the management and development of the region’s energy resources.
For the BARMM and MENRE, this development brings increased autonomy over its abundant energy resources, greater economic opportunities, improved geological knowledge, and the potential for community uplift through job creation and development programs. ###