President Ferdinand Marcos Jr. on Wednesday unveiled eight new Petroleum Service Contracts (PSCs) for oil exploration areas in different parts of the country, which the government said would pave the way to accelerate domestic energy exploration and production.
The eight contracts – covering exploration areas across the Sulu Sea, Cagayan, Cebu, Northwest Palawan, East Palawan, and Central Luzon – are the largest batch of PSCs awarded in a single period in the country’s history.
‘These service contracts represent our continued efforts to attain greater energy security, and therefore, economic stability, and self-reliance,’ Marcos said during the presentation of the PSCs at Malacañang.
Collectively, the contracts represent a potential investment commitment of around $207 million (around P12 billion) over a seven-year exploration period.
The new contracts also include the world’s first competitive bid round for native hydrogen – a clean, zero-carbon source of energy which the President said to be ‘[holding] immense promise for our country and for the world’ – alongside co-managed petroleum projects with the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
‘Consequently, these efforts will capture the interest of more international partners to invest in our country and to join our quest to discover new indigenous resources,’ Marcos said.
‘But, with every partnership comes a greater challenge: to ensure that progress is achieved with integrity, responsibility, and with respect for our people,’ he added. In a statement, the Department of Energy (DOE) said all the eight PSCs have undergone a transparent and competitive selection process under the Philippine Conventional Energy Contracting Program (PCECP).
It ensured that exploration rights were granted to legally, financially and technically qualified proponents. PSC Nos. 80 and 81 were awarded to a consortium composed of Australia-based Triangle Energy (Global) Ltd., United Kingdom-registered Sunda Energy Plc; and local firms PXP Energy Corp. and The Philodrill Corp.
Co-managed by the DOE and the Ministry of Environment, Natural Resources, and Energy of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM-MENRE), these service contracts aim to revitalize petroleum exploration in the southern Sulu Sea, generating new economic and employment opportunities for communities across BARMM and Mindanao. PSC 80 covers approximately 780,000 hectares, while PSC 81 spans about 532,000 ha.
PSC No. 82 located in Cagayan basin and has an area of 480,000 ha was awarded to Triangle Energy (Global) Ltd.
PSC Nos. 83 and 84, both for native hydrogen exploration in Central Luzon, were awarded to United States-based Koloma Inc. SC 83 covers 126,645 hectares while SC 84 covers 85,082 ha.
PSC No. 85, covering 127,475 ha in onshore Cebu, was awarded to Gas 2 Grid Pte. Ltd.
PSC No. 86, awarded to a consortium of Filipino companies composed of The Philodrill Corporation, Anglo Philippine Holdings Corp., PXP Energy Corp., and Forum Energy Philippines Corp., covers 132,000 ha in the Northwest Palawan Basin.
PSC No. 87, located in the East Palawan Basin, was awarded to Ratio Petroleum Ltd. of Israel. This is the company’s second petroleum service contract in the country, following PSC 78, also situated in the East Palawan Basin.
No China interference
In a message to reporters, Energy Secretary Janette Garin said they were not expecting interference from China, especially on PSC 86, which is located offshore west of Palawan in the West Philippine Sea.
‘But all projects are well coordinated with the DND (Department of National Defense), whether near the disputed areas or not,’ she added.
As of Wednesday, service contractors may now commence their respective activities, including geological and geophysical surveys such as seismic and aeromagnetic studies to identify drillable prospects, with the potential to discover both native hydrogen reservoirs and new petroleum fields.
Marcos encouraged the service contractors to turn their investments into ‘engines of progress.’
‘Operate with accountability, with respect for the environment, and fairness towards the communities that host your operations,’ the President said.
‘Let us prove that responsible enterprise and national development can go hand-in-hand – that growth built on transparency and responsibility is growth that will last,’ he added. Service contractors will fund and undertake educational scholarships, capacity-building, and community development programs even during the early exploration phase, according to DOE.
Once production begins, host communities will further benefit through infrastructure development, social programs, and local employment opportunities generated by these projects.
According to the DOE, the eight PSCs reflect the renewed investor confidence in the Philippine upstream energy sector, opening for new gas exploration initiatives amid the decline of the Malampaya Gas Field. The Malampaya Deep Water Gas-to-Power Project, the country’s first and only indigenous gas resource, currently supplies about 40 percent of Luzon’s electricity needs. It was commissioned in 2001, but is expected to be commercially depleted by 2027 with its supply expected to dwindle starting in 2024.
In May 2023, Marcos signed the Renewal Agreement of Service Contract No. 38 (SC 38), which allows the continued extraction of natural gas from a portion of the Malampaya gas field until February 2039.The $893-million project involves drilling two new deep water wells, Camago-3 and Malampaya East-1, along with Bagong Pag-asa-1, a new exploration field.
Drilling operations operations under the Malampaya Phase 4 Project started by end-June. The government expressed optimism in finding more gas reserves at Malampaya, with the project’s timely deployment for drilling to help in attaining the goal of delivering ‘first gas’ by the fourth quarter of 2026.