PH inks deal with Israeli firm on oil exploration east of Palawan

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President Rodrigo Duterte signs Petroleum Service Contract No. 76 covering Area 4 in Eastern Palawan under the Fifth Philippine Energy Contracting Round (PECR 5) Wednesday.

Metro Manila (CNN Philippines, October 18) — The Philippines on Wednesday signed a deal with Israel firm Ratio Petroleum Ltd. allowing it to explore waters east of Palawan for oil and gas resources.

President Rodrigo Duterte signed the Petroleum Service Contract (PSC) 76 with Energy Secretary Alfonso Cusi, Ratio Patroleum CEO and President Itay Raphael Tabibzada and other firm representatives on Wednesday.

The PSC covers Area 4 — 416,000 hectares in the East Palawan Basin. The contract is slated to last for seven years, costing around $34,350,000 U.S. dollars.

Cusi said the deal would ensure energy security in the country.

"We are currently experiencing how our dependence on importation has left us at the mercy of price movements in the global oil markets. We need to boost the exploration and development of our own energy resources and the awarding of the petroleum service contract to Ratio Petroleum is a step in the right direction," Cusi said in a statement Sunday.

The deal is under the fifth round of the Philippine Energy Contracting Round (PECR-5) circular. The PECR-5 of the Department of Energy offers 11 areas for oil exploration mostly located in Luzon, and fifteen areas for coal exploration in Mindanao.

Former Presidential Spokesperson Harry Roque earlier said the deal would have been signed in September.

In a media conference Thursday, Presidential Spokesperson Sal Panelo said the deal poses no legal impediment.

"We feel that the constitution does not prohibit these particular kinds of agreements," he said.

This is the first PSC to be signed under Duterte's term. The last service contract covering an oil exploration northwest of Palawan, SC 75, was signed in 2013 with operator PXP Energy Corp.