Ratio Petroleum Ltd., the parent company of Ratio Guyana Limited which holds a 25% interest in the Kaieteur Block in Guyana along with partners, Esso Exploration & Production Guyana Limited (35% & Operator), Cataleya Energy Limited (25%) and Hess Corporation (15%), has signed a Petroleum Service Contract (PSC) in the Philippines with President Rodrigo Duterte Duterte.
The PSC allows Ratio Petroleum to explore waters in 416,000 hectares Area 4, east of Palawan for oil and gas resources.
According to a CNN report, President Duterte signed the PSC #76 with Energy Secretary Alfonso Cusi, Ratio Patroleum CEO and President Itay Raphael Tabibzada and other firm representatives on Wednesday.
The contract is slated to last for seven years, costing around $34,350,000 U.S. dollars.
CNN reports Cusi as saying that 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.
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.
According to the CNN report, 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.
The Kaieteur Block in Guyana, where Ratio has an interest, is adjacent to the Stabroek Block, where the world class Liza discovery was made by ExxonMobil in 2015. Liza was the first oil discovery in Guyana. A total of 9 discoveries have been made in block by the US oil major. To date, the total estimated reserves in the block amount to more than 4 billion barrels of oil.