Senator Sherwin Gatchalian urged the government Friday to aggressively pursue oil and gas exploration explorations now that the arbitration court in Singapore has finally resolved the $1.1-billion tax case of Shell Philippines Exploration B.V. over the Malampaya tax dispute.
Gatchalian, chair of the Senate Committee on Energy, said there was no longer a legal impediment for investors to conduct oil and gas explorations after the ruling issued by the International Chamber of Commerce in Singapore.
Gatchalian said the multi-billion tax case had discouraged foreign players from conducting petroleum explorations in the Philippines over the past several years and driven away investments in high risk, capital-intensive and technology-intensive sectors.
“With the case now behind us, it is high time for the government to aggressively pursue a “Drill, Drill, Drill” program, so that we can tap these oil and gas resources and use them to achieve Philippine energy independence and pave the way for the country to become an energy exporting powerhouse,” Gatchalian said.
The Philippines has been grossly trailing behind its Asian neighbors in terms of petroleum exploration and development activities.
The Philippines drilled an average of five wells in a 10-year period compared with the double and triple averages of other Southeast Asian countries.
The Petroleum Association of the Philippines is also optimistic that the ICC ruling on Spex’s corporate income tax issue will revitalize the oil exploration industry.
The Malampaya consortium claimed that it obtained a favorable ruling from the ICC on Spex’s tax dispute with the government it filed in 2015. Spex is the operator of the Malampaya gas project in northwest Palawan with its 45-percent stake.
Other members of the consortium are Chevron Malampaya LLC with a 45-percent stake and state-owned PNOC Exploration Corp. owning the remaining 10 percent.
“I have not seen the decision itself, although I have read and heard about it. I hope the government will react positively. This, of course, will be of great help to the exploration industry,” said PAP chairman Rufino Bomasang.