How To Write A Contract For A Pcr1 Project

Transcription

1 W01/3868 The First Philippine Petroleum Public Contracting Round (PCR-1) Eduardo V. Mañalac Undersecretary Department of Energy

2 Why Philippines? Prospectivity? Market? Economics? 2

3 PCR-1 1 offers easy access to data 3

4 PCR-1 1 offers easy access to lots of data 137,000 line km 2D seismic 3,600 sq km 3D seismic 144 wells 4 Also available are new, high quality seismic data in NW Palawan, Sulu Sea and East Palawan basins.

5 Easy access to data PGS MC3D SURVEYS NW Palawan MC3D surveys: NW Palawan 897 km 2 acquired 1996 Malampaya 1,112 km 2 acquired 2002 Total 916 km 2 3D over open acreage Malampaya High Resolution MC3D first to be acquired in Asia Pacific 5

6 Malampaya HD-MC3D Open Area Data Example Post-Nido turbidites Top Nido limestones 7

7 Easy access to data NW Palawan 3D, Palawan 2D, Sulu Sea and East Palawan 2D Surveys by WesternGeco ~3,500 sq km 3D in NW Palawan ~4,800 line km 2D in Palawan > 5,700 line km of 2D data in the Sulu Sea and East Palawan basins Balabac Bancauan Cagayan Ridge 8 Covers significant area of Sandakan basin which is analogous to the petroleum rich Baram and Tarakan deltas Sandakan

8 Structures km 2. 0 Thrust structuring - multiple closed structures Closed anticline Pre-mid Miocene compressional event Closed anticline

9 10 Malaysia analogue

10 Indonesia analogue TOE-THRUST STRUCTURES 13

11 Analogue examples 14

12 Easy access to data 15 DATA ROOMS Selected data for viewing only Reservation: to Rooms Physical Virtual Opening 5 Aug Feb Sept Feb Location Manila Manila, Stavanger, London, Houston Description Workstation; paper and digital data Workstation with viewing and interpretation software Fee USD 1000 (creditable to data purchase) for max of 3 ~USD 800/day

13 PCR-1 1 offers easy access to data excellent contractual terms 16

14 Highlights of the fiscal terms Contract Area 2,000-8,000 sq km Contract Term 7 yrs. exploration + 3 yrs. extension + 25 yrs. production + 15 yrs. extension Signature Bonus USD 50,000 - USD 250,000 Royalties None Income Tax Tax rate: 32% - paid out of Government share Cost Oil/Gas Cost oil limit: 70% of gross income; Capital expenditures depreciated over 5 to 10 yrs. Profit Oil/Gas Government share: 60% FPIA up to 7.5% of gross proceeds with at least 15% Filipino participation State Participation None 17

15 SC Profit Sharing $ Gross Proceeds 7.50 less FPIA (to Contractor) less Cost Recovery (to Contractor) Net Proceeds $ % Government Share $ % Contractor's Share 18

16 Comparison of Fiscal Terms 19 Spain Argentina Portugal G. Mexico New Zealand Australia Peru Philippines Tunisia Thailand Colombia Morocco Mongolia China Indon. Gas Congo E. Indonesia PNG Vietnam India Ivory Coast Trinidad Ecuador Albania Venezuela Algeria Angola Syria Myanmar Egypt Malaysia Brunei Indonesia Royalty/Tax System Production Sharing Contract Service Agreement (Modified from Daniel Johnston & Co., Inc.) Contractor share of income post gov't cut & taxes (%)

17 Financial Qualifications/Incentives Liberalized viability of company requirements Financial qualifications related to company working interest and work commitment Past exploration expenditure can be cost recoverable in new blocks 20 Filipino Participation Incentive Allowance (FPIA)

18 PCR-1 1 offers easy access to data excellent contractual terms high petroleum potential basins/areas 21

19 Proximity to proven petroleum provinces NW Palawan SW Palawan Proven oil/gas provinces 22 E Palawan Sulu Sea Reed Bank Surrounded and near similar oil/gas geology in Malaysia, Brunei & Indonesia Analogous to some Vietnam / S. China oil structures

20 23 Very high success rates in NW Palawan by world standards Success rates in NW Palawan basin (58 wildcat wells) 5% 10% 3% 9% 9% 29% 35% Dry Oil Discovery Gas Discovery O&G Discovery O&G Shows Oil Show Gas Show

21 Contract areas Total of 46 contract areas being offered (total area ~222,000 sq km) Located in shallow to ultra deep waters close to producing fields in NW Palawan and in vast frontier areas in Sulu Sea, East Palawan and Reed Bank 24

22 Key dates Issuance of related circulars June 2003 Announcement / Round opening 5 August 2003 Physical data room opening August 2003 to February 2004 Virtual data room opening September 2003 to February 2004 Road shows September 2003 to November 2003 Company evaluation of areas August 2003 to February 2004 Round closing 2 March 2004 Contract awarding May

23 Conclusion The DOE is ready to assist in any possible way, those who may be interested to explore in the Philippines. In PCR-1, we have new information, excellent contractual terms and conditions and areas that are highly prospective. 26

24 DOE Contact MR. EDUARDO V. MAÑALAC ALAC Undersecretary Direct line: (63-2) Fax no.: (63-2) Mobile: (63-917) DEPARTMENT OF ENERGY Energy Center, Merritt Road, Fort Bonifacio, Taguig Metro Manila, Philippines