The Department of Energy and PNOC Exploration Corp. are optimistic newly-signed Executive Order 80 will revitalize the country’s oil and gas industry.
“This will enable us to start our exploration activity for oil and gas,” PNOC Exploration president Pedro Aquino said.
PNOC Exploration, the oil and gas unit of state-run Philippine National Oil Co., had been unable to pursue other exploration projects due to Executive Order 556 requiring the company to conduct a bidding on oil and gas exploration ventures.
EO 80, signed by President Rodrigo Duterte on May 28, repealed EO 556 signed by former president Gloria Macapagal-Arroyo.
Arroyo in 2006 did away with the “farm-in” or “farm-out” contracts in favor of a “strict bidding procedure” in forging a partnership with interested parties.
Under EO 80, President Duterte allowed PNOC Exploration to enter into farm-in/farm-out agreements.
“We will wait for the DoE [Department of Energy] to come up with the implementing rules. By and large, we can now get a partner without going through public bidding,” Aquino said.
Farm-in/farm out refers to a practice, recognized and accepted in the oil and gas industry, of allowing third participation to spread the risks inherent in oil and gas exploration, development and production.
Under the EO, third parties can participate in the service contracts awarded by the government to PNOC EC. The company can also participate in the service contracts awarded by the government to third parties.
Energy Undersecretary Donato Marcos said the agency would speed up the implementing rules of EO 80.
“We will harmonize it with PCECP [Philippine Conventional Energy Contracting Program] and existing rules and guidelines of existing service contracting program which will need thorough evaluation on the proponent’s technical, financial and legal compliances,” he said.