Gov't launches frantic search for new oil sources - Philipines
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First posted 03:06am (Mla time) Aug 20, 2005 By Christine Avendano, Blanche S. RiveraInquirer News Service Editor's Note: Published on page A1 of the August 20, 2005 issue of the Philippine Daily Inquirer
WITH world prices at record levels, the government has started a frantic search for new oil sources, both locally and internationally, to feed the country's growing fuel requirements in the next five years.
Yesterday, President Macapagal-Arroyo instructed Energy Secretary Raphael Lotilla and Foreign Secretary Alberto Romulo to exert "all diplomatic efforts" to secure cheap oil for the country and ensure "more stable (oil) supply arrangements."
Ten exploration contracts have been awarded to foreign and local oil firms to search in waters off the Visayas and Northern Luzon, the Department of Energy said in a statement.
"We have to actively push for energy independence by developing our own resources to mitigate the adverse effects of soaring oil prices," Lotilla said.
The government is eyeing Russia and Saudi Arabia as possible sources of cheap oil.
"We must act globally and locally," Ms Arroyo told a gathering of government officials, state universities and
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colleges, and oil players at an energy command conference in Malaca¤ang where she reiterated the need to adopt energy conservation measures.
Romulo told reporters he and Lotilla would meet to discuss an "all-out" program based on the President's directive.
According to Romulo, President Arroyo sounded the alarm of the looming oil crisis as early as April during the Asia-African summit in Jakarta.
"Saudi has about one-quarter of the oil reserves, so certainly they are a source of oil for us," Romulo told reporters.
The government is also pushing a fresh initiative to search for domestic petroleum reserves to meet the challenge of skyrocketing crude oil prices that could impair economic growth.
Gas exploration
On Thursday, Economic Planning Secretary Augusto Santos said that economic growth would slow while inflation would rise unless international oil prices went back below $60 a barrel for the rest of the year. World oil prices hover around $64 after reaching a record high of $67.10 last week.
A consortium involving Australia's BHP Billiton, Amerada Hess Ltd., Unocal Sulu Ltd. and Sandakan Oil II, LLC, would explore for oil and gas in the Sulu Sea.
The consortium of Alcorn Gold Resources Corp., Trans-Asia Oil and Energy Development Corp. and PetroEnergy Resources Corp. won permission to search over the East Visayan basin off the island of Leyte.
EF Durkee and Associates will drill in the Piat-San Jose area of the Cagayan Valley region of northern Luzon near a gas field operated by the government.
India's Laxmi Organic Industries Ltd. will explore in the Mindoro-Cuyo basin west of Mindoro island. The consortium of Ottoman Energy Ltd., Australasian Energy Ltd. and Trans-Asia Oil and Energy Development Corp. won a contract to explore west of Palawan.
Nido Petroleum Philippines Ltd. was awarded a contract off Palawan.
Petronas Carigali and Philippine National Oil Co.-Exploration Corp. will drill off Mindoro, Aragorn Power Corp. will prospect in the Cagayan basin, Phil-Mal Petroenergy Corp. in the south of Cebu, and Ottoman Energy Ltd. will drill northwest of Palawan.
A petroleum assessment conducted with the help of the Norwegian Agency for Development Cooperation showed that the country's total recoverable petroleum resources could reach about 3.6 billion barrels of oil, 28.5 trillion cubic feet of gas and another 165 million barrels of condensate, the DOE said.
Lotilla said the groups will spend about $94 million over the seven-year term of the exploration contracts.
Oil imports
The Philippines imports about 126 million barrels of oil per year, the DOE said. Oil, nearly all of which is imported, accounts for about 39 percent of the country's total energy consumption.
Based on the updated Philippine Energy Plan 2005, the country's gasoline demand is projected to increase by 7.4 million barrels in the next five years.
From its current consumption of 27.9 million barrels of gasoline, the Philippines would require 29.1 million barrels next year and 35.4 million barrels by 2010.
The gasoline demand is seen to increase to 40.4 million barrels by 2013 or around 12 million barrels more than the current requirement.
"The current crisis should not have been a surprise. Many quarters, including Greenpeace, have long been clamoring for the government to take a strategic and comprehensive approach regarding our country's need for energy and energy security and environmental protection," Greenpeace regional energy campaigner Red Constantino said.
Renewable sources
The environmentalist group is pushing for the development of new and renewable energy sources to reduce the country's dependence on oil.
Constantino said passing the ethanol bill authored by Bukidnon Rep. Miguel Zubiri would be crucial in facing the long-term problem of oil dependency.
The bill requires all gasoline mixtures to have 5 percent ethanol content, which would increase to 10 percent three years after the law's implementation.
Ethanol can be sourced from sugarcanes.
Greenpeace noted that Brazil has cars running on 95 percent ethanol while Japan has a 3-percent mandated blend which it is importing from Brazil.
Ethanol bill
The first ethanol plant in the Philippines was established by Bronzeoak Philippines and the National Development Corp. in San Carlos, Negros Occidental. The plant produces 100,000 liters of ethanol per day.
"This is the right direction, and the government would do well to support this initiative," Constantino said.
He said the San Carlos firm is eyeing two more production plants while another sugar miller in Mindanao is interested in ethanol production. Seaoil and two other companies are keen on a similar venture, Constantino said.
If the ethanol bill is passed, the Philippines would need 222 million liters of ethanol a year based on the 2005 gasoline demand.
Constantino said this would open the Philippine market to foreign firms interested in investing in renewable energy sources.
Incentives
"Maybe the government can give incentives similar to what it gives the coal power plants. It will send a strong signal to the local and foreign investor community," he said.
The Philippines uses 320,000 barrels of oil per day or 116.8 million barrels a year. The transport, power and industry sectors are the biggest oil consumers in the country.
First posted 03:06am (Mla time) Aug 20, 2005 By Christine Avendano, Blanche S. RiveraInquirer News Service Editor's Note: Published on page A1 of the August 20, 2005 issue of the Philippine Daily Inquirer
WITH world prices at record levels, the government has started a frantic search for new oil sources, both locally and internationally, to feed the country's growing fuel requirements in the next five years.
Yesterday, President Macapagal-Arroyo instructed Energy Secretary Raphael Lotilla and Foreign Secretary Alberto Romulo to exert "all diplomatic efforts" to secure cheap oil for the country and ensure "more stable (oil) supply arrangements."
Ten exploration contracts have been awarded to foreign and local oil firms to search in waters off the Visayas and Northern Luzon, the Department of Energy said in a statement.
"We have to actively push for energy independence by developing our own resources to mitigate the adverse effects of soaring oil prices," Lotilla said.
The government is eyeing Russia and Saudi Arabia as possible sources of cheap oil.
"We must act globally and locally," Ms Arroyo told a gathering of government officials, state universities and
Print this storySend this storyWrite the editorReprint this articleView other stories
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}
colleges, and oil players at an energy command conference in Malaca¤ang where she reiterated the need to adopt energy conservation measures.
Romulo told reporters he and Lotilla would meet to discuss an "all-out" program based on the President's directive.
According to Romulo, President Arroyo sounded the alarm of the looming oil crisis as early as April during the Asia-African summit in Jakarta.
"Saudi has about one-quarter of the oil reserves, so certainly they are a source of oil for us," Romulo told reporters.
The government is also pushing a fresh initiative to search for domestic petroleum reserves to meet the challenge of skyrocketing crude oil prices that could impair economic growth.
Gas exploration
On Thursday, Economic Planning Secretary Augusto Santos said that economic growth would slow while inflation would rise unless international oil prices went back below $60 a barrel for the rest of the year. World oil prices hover around $64 after reaching a record high of $67.10 last week.
A consortium involving Australia's BHP Billiton, Amerada Hess Ltd., Unocal Sulu Ltd. and Sandakan Oil II, LLC, would explore for oil and gas in the Sulu Sea.
The consortium of Alcorn Gold Resources Corp., Trans-Asia Oil and Energy Development Corp. and PetroEnergy Resources Corp. won permission to search over the East Visayan basin off the island of Leyte.
EF Durkee and Associates will drill in the Piat-San Jose area of the Cagayan Valley region of northern Luzon near a gas field operated by the government.
India's Laxmi Organic Industries Ltd. will explore in the Mindoro-Cuyo basin west of Mindoro island. The consortium of Ottoman Energy Ltd., Australasian Energy Ltd. and Trans-Asia Oil and Energy Development Corp. won a contract to explore west of Palawan.
Nido Petroleum Philippines Ltd. was awarded a contract off Palawan.
Petronas Carigali and Philippine National Oil Co.-Exploration Corp. will drill off Mindoro, Aragorn Power Corp. will prospect in the Cagayan basin, Phil-Mal Petroenergy Corp. in the south of Cebu, and Ottoman Energy Ltd. will drill northwest of Palawan.
A petroleum assessment conducted with the help of the Norwegian Agency for Development Cooperation showed that the country's total recoverable petroleum resources could reach about 3.6 billion barrels of oil, 28.5 trillion cubic feet of gas and another 165 million barrels of condensate, the DOE said.
Lotilla said the groups will spend about $94 million over the seven-year term of the exploration contracts.
Oil imports
The Philippines imports about 126 million barrels of oil per year, the DOE said. Oil, nearly all of which is imported, accounts for about 39 percent of the country's total energy consumption.
Based on the updated Philippine Energy Plan 2005, the country's gasoline demand is projected to increase by 7.4 million barrels in the next five years.
From its current consumption of 27.9 million barrels of gasoline, the Philippines would require 29.1 million barrels next year and 35.4 million barrels by 2010.
The gasoline demand is seen to increase to 40.4 million barrels by 2013 or around 12 million barrels more than the current requirement.
"The current crisis should not have been a surprise. Many quarters, including Greenpeace, have long been clamoring for the government to take a strategic and comprehensive approach regarding our country's need for energy and energy security and environmental protection," Greenpeace regional energy campaigner Red Constantino said.
Renewable sources
The environmentalist group is pushing for the development of new and renewable energy sources to reduce the country's dependence on oil.
Constantino said passing the ethanol bill authored by Bukidnon Rep. Miguel Zubiri would be crucial in facing the long-term problem of oil dependency.
The bill requires all gasoline mixtures to have 5 percent ethanol content, which would increase to 10 percent three years after the law's implementation.
Ethanol can be sourced from sugarcanes.
Greenpeace noted that Brazil has cars running on 95 percent ethanol while Japan has a 3-percent mandated blend which it is importing from Brazil.
Ethanol bill
The first ethanol plant in the Philippines was established by Bronzeoak Philippines and the National Development Corp. in San Carlos, Negros Occidental. The plant produces 100,000 liters of ethanol per day.
"This is the right direction, and the government would do well to support this initiative," Constantino said.
He said the San Carlos firm is eyeing two more production plants while another sugar miller in Mindanao is interested in ethanol production. Seaoil and two other companies are keen on a similar venture, Constantino said.
If the ethanol bill is passed, the Philippines would need 222 million liters of ethanol a year based on the 2005 gasoline demand.
Constantino said this would open the Philippine market to foreign firms interested in investing in renewable energy sources.
Incentives
"Maybe the government can give incentives similar to what it gives the coal power plants. It will send a strong signal to the local and foreign investor community," he said.
The Philippines uses 320,000 barrels of oil per day or 116.8 million barrels a year. The transport, power and industry sectors are the biggest oil consumers in the country.
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