Malampaya oil farm-out still open
Wednesday, June 14, 2006
By MYRNA M. VELASCO
With questions being raised on the corporate identity of a partner it has tapped for the Camago-Malampaya Oil Leg (CMOL) project, the Philippine National Oil Company (PNOC) admits that some issues have jammed the immediate award of a farm-out contract.
The state-run firm made previous announcement that it has taken in Mitra Energy Ltd., a Malaysia-registered firm, as part of the consortium to develop the longplanned Malampaya oil rim.
Company officials though emphasized that the announcement does not merit any immediate award of the contract yet, noting that "there are still issues that have to be resolved."
A ranking official of PNOC averred that Mitra Energy has been advised of various conditions it has to meet, otherwise, "if they will not qualify and meet certain requirements, then we cannot award it to them."
Should the current party fails to satiate all the conditions precedent to the contract award, the company official said "we have an option to go to other bidders."
It has been disclosed that PNOC have chosen from at least eight investor groups for the farm-out deal. The political clan of the Mitras of Palawan already denied any links to the winning company.
The strict scrutiny of entrants for the CMOL farmout stake is in deference to the tripartite agreement that PNOC has entered into with the Department of Energy (DoE) and its consortium partners in Service Contract 38 that developed the Malampaya deep water gas-to-power project — the Shell Philppines Exploration B.V. and Chevron.
PNOC president Eduardo V. Mañalac enthused that it remains a priority in this undertaking that the existing gas infrastructure would be protected; and that it becomes critical concern for the CMOL stakeholders that production at the gas field shall not be affected in any way.
Any impediment hurled in Malampaya’s gas production may trigger collateral damage to the country and consumers, because this is where fuel for 2,700 megawatts of electric capacity being supplied to the Luzon grid is coming from.
Meanwhile, the PNOC official revealed that a consultation process with both the energy development and the SC 38 consortium has to be held first before any decision of award can be finalized, thus, "it is still premature to say that an award has already been made."
At this point, negotiations phase has not even reached yet the DoE level.
The Mitra Energy group has proposed development cost of $ 450 million for the project; and proffers oil production to kick off before the end of 2007.
It was however intimated that the Mitra group may not be alone in its bid as it has indicated to tap some other partners for the project.
Even PNOC has expressed doubts over the company’s ability to undertake the project on its own.
posted by philpower @ 10:58 AM,
