Norwegian companies may explore oil/gas in Philippines

Norway’s two largest oil producers, Statoil ASA and Norsk Hydro ASA, may bid for some of the 46 areas in the Philippines’ first auction of oil-and-gas-exploration licenses, a global news agency reported quoting a government official.
     The Philippine Department of Energy will visit the two Norwegian companies in Stavanger early October, Energy Undersecretary Eduardo Manalac said in an interview with Bloomberg News.
     Philippine officials are touring Europe, North America and Australia in October to promote the auction. The government wants to accelerate discovery and development of the country’s energy reserves to cut dependence on oil imports and meet rising gas demand from power producers.
     “We need gas reserves to prevent mega-shutdowns in our power sector by 2007 and 2008. We are confident gas reserves found will have a market,” Manalac told Bloomberg.
     The Philippines currently has one commercially operating natural-gas field.
     The 46 offshore areas on offer in the auction cover 222,914-square kilometers around the western island of Palawan and adjacent to the Malampaya gas field, the nation’s largest. Malampaya was developed by the Philippine National Oil Co., Royal Dutch/Shell Group and ChevronTexaco Corp.
     Gas demand in the Philippines is expected to rise about sevenfold to 200 billion cubic feet a year by 2012 from 29-billion cubic feet because of increased consumption from power producers, the report says.
     Potential bidders have seven months starting September this year to evaluate data on the exploration areas and until March 2 next year to make an offer.
     Under the terms offered by the government, a contractor will be able to deduct as much as 70 percent of sales to cover exploration and development costs, and get 40 percent of the venture’s profit. The remainder will go to the government.

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