Aussie company starts oil exploration efforts off Cebu

Business Mirror
Wednesday, 07 January 2009

THE Department of Energy (DOE) and Nor-Asian Energy Limited are preparing to sign agreements with two local government units in southern Cebu as they expect to commence offshore exploratory oil drilling operations later this year.

DOE Visayas director Vicente Labios told the BusinessMirror that the draft memorandum of agreement has been sent to the local governments of Argao and Sibonga towns in southeastern Cebu for their consideration.

“The agreement will govern our activities and procedures as well as processing of claims of fishermen who have their livelihood disrupted,” Labios said.

He said Nor-Asian has already identified a spot some seven kilometers offshore as a prospective drilling site to determine whether deposits of oil found during seismic surveys are of commercial quality and quantity. Early estimates place the deposits off Argao at some 270 million barrels.

Labios, however, said the activities will be delayed because Nor-Asian has difficulty looking for a floating rig for the area.

Nor-Asian is a company jointly owned by Australia’s Ottoman Energy Ltd. and AustralAsian Energy Ltd.

The Commission on Human Rights (CHR) as well as environmental activist-lawyers from the Integrated Bar of the Philippines-Cebu is questioning the planned exploration activities, citing irregularities in the procedures and the lack of public consultations.

CHR-Cebu is also looking at the alleged role of Army soldiers in pacifying dissent among fishermen affected by the exploration.

Labios, however, said the consultations conducted in 2008 already cover both the preliminary surveys and the planned exploratory drilling.

“That consultation already covered everything,” he said.

He said another round of consultations will be conducted in the event Nor-Asian drills for commercial quantities.

Labios explained the proposed memorandum of agreements with the Sibonga and Argao local governments will also contain provisions for compensation packages to affected fishermen.

Nor-Asian is the second company to push oil prospecting efforts in the seas around Cebu.

A local company of Japan Petroleum Exploration recently withdrew activities in western Cebu off Pinamungajan town after exploration drills indicated that oil in the area is not of commercial quantity.

Environmental activist Gloria Estenzo-Ramos said their group has a pending case against the DOE and the national government—filed in behalf of “permanent residents” of Tañon Strait such as the dolphins, whales and other marine animals. She said this must first be resolved before Nor-Asian proceeds with its drilling operations.

She insists it is only Congress and the President, who can award service contracts to oil exploration companies, not just the DOE.