IN a move that redefines the country’s energy frontier, President Ferdinand R. Marcos Jr. on Wednesday unveiled eight new Petroleum Service Contracts (PSCs)-covering exploration blocks across the Sulu Sea, Cagayan, Cebu, northwest Palawan, east Palawan, and Central Luzon. It is, by all accounts, the largest batch of PSCs ever awarded in a single stroke in Philippine history. And it signals the government’s resolve for energy self-sufficiency-a dream that other heads of state nurtured.
‘Today marks a milestone,’ declared Energy Secretary Sharon Garin, as she welcomed Philippine and international partners from Australia, the United Kingdom, Singapore, Israel, and the United States during the signing ceremony in Malacañang. ‘This is the largest batch of Petroleum Service Contracts awarded in a single period-a powerful demonstration of this administration’s resolve to accelerate exploration and production of our country’s indigenous energy resources.’
The eight contracts signal a resurgence of investor confidence in the nation’s upstream energy sector -a critical push amid the waning output of the Malampaya gas field, once the country’s energy lifeline. Collectively, the PSCs represent a potential investment commitment of $207 million, or roughly P12 billion, over a seven-year exploration span.
The DOE notes that these include the world’s first competitive bid round for native hydrogen and co-managed petroleum projects with the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM)-an unprecedented stride toward inclusive, regionally balanced energy development, the sort of economic push of President Marcos to ensure that other regions benefit too, not necessarily that of Imperial Manila.
Secretary Garin affirmed that the DOE remains steadfast in ensuring the complete and timely implementation of these service contracts, calling them cornerstones of long-term energy security and sustainability.
This new dawn follows a long, uncertain interlude. When the Malampaya discovery electrified the nation in 1989, and exploration fever gripped the archipelago. But over the decades, the flame dimmed. Senate deliberations leading to the passage of Republic Act 12120, or the Philippine Natural Gas Industry Development Act, exposed the sobering truth: exploration had stalled.
Regulatory opacity, shifting fiscal regimes, and the absence of a coherent roadmap had turned investors away. The once-golden promise of our sedimentary basins was abandoned like Mount Diwalwal after its gold rush-rich in potential, chaotic in governance, and strewn with the remains of broken dreams.
Now, the DOE under Secretary Garin is rewriting the investment playbook. Through Department Circular No. DC2025-09-0017, titled ‘Grant of Special Allowances for Petroleum Service Contractors,’ the agency has crafted a more predictable, investor-friendly framework that still upholds the constitutional 60-40 equity rule.
Under this new regime, service contractors may deduct special allowances from gross proceeds, while the government retains its 60 percent share calculated from gross income less operating expenses. Operating expenses of up to 70 percent will now be reimbursable, giving investors not just relief but confidence.
For marginal petroleum operations, an additional allowance kicks in when costs exceed the 70 percent threshold-ensuring that even frontier fields with higher geological risk are not left behind. Moreover, a 5 percent allowance on gross proceeds awaits companies that pioneer the first commercial developments in untapped basins. These were the incentives that were dangled to push oil drilling operations to new frontiers.
As the circular emphasizes, there is a ‘need to offer improved fiscal terms to complement other government initiatives in attracting more exploration and production companies.leading to the discovery of more oil and gas fields in the country.’ Other Asean neighbors-Malaysia and Indonesia, notably-had long understood the power of incentives. They lured explorers with accelerated capital allowances, tax holidays, and export duty waivers. The Philippines, at last, is catching up, balancing national benefit with private enterprise vitality.
The DOE’s approach aligns with Presidential Decree No. 87, the Oil Exploration and Development Act of 1972, yet modernizes it for a 21st-century context-one that rewards both discovery and discipline, risk and responsibility. The extension of Service Contract 38 over Malampaya, the passage of RA 12120, and now the issuance of this special allowance circular all point to a unified direction: the rebirth of Philippine exploration.
Each well drilled, each contract signed, is more than a line in the DOE’s ledger-it is a testament to the nation’s will to secure its own energy destiny. If the past decades were marked by drift and delay, the present signals movement, method, and momentum. And as the Philippines reclaims its place among serious energy explorers, the message is clear: We are done waiting for luck. We are now drilling for our future.