PNOC-MITRA DEAL
Change of Mind
Another foreign investor has found itself at the wrong end of a sudden change in government rulings.
 In November 2005, President Gloria Macapagal-Arroyo issued Executive Order 473, tasking the Department of Energy and the Philippine National Oil Company to pursue the immediate exploration, development, and production of crude oil from the Camago-Malampaya Reservoir offshore Palawan. The directive also encouraged the participation of new third-party investors, since the consortium of Shell, Chevron Texaco, and the PNOC–Exploration Corporation that holds the rights to the Malampaya oil rim had expressed that it could not pursue the development of the Camago-Malampaya oil leg because this was not commercially viable.
Then came EO 556, issued on 11 August 2006 but backdated to 11 June 2006. Essentially, this directive nullifies any negotiation or agreement that the PNOC may have entered into with third-party investors for the Camago-Malampaya oil leg. However, prior to EO 556, PNOC had already reached an understanding with Malaysian company Mitra Energy Ltd to sign a contract for the exploration of the Camago-Malampaya Reservoir. Thus, the signing of the contract, which had been scheduled for 25 August 2006, was suddenly shelved.
Though Mitra officials have confirmed that no contract had yet been signed, they were already deep into negotiations with PNOC. The whole affair has caused much concern among foreign investors who are beginning to worry about the sanctity of contracts in the Philippines.
Guimaras oil spill
Picking Up the Pieces
 On 11 August, the tanker M/S Solar 1, owned by Sunshine Maritime Development Corporation and commissioned by Petron Corporation, sank in the waters off Guimaras Island in Western Visayas with two million liters of bunker fuel. In addition to the loss of life (two members of the tanker’s crew remain missing), the incident took an even more disastrous turn when an estimated 1.3 million liters of the tanker’s bunker fuel load leaked and reached the shores of Guimaras.
The oil spill is the biggest in Philippine history, prompting President Gloria Macapagal-Arroyo to declare the disaster a national calamity. The Regional Disaster Coordinating Council estimates the oil slick damaged 12 hectares of sea grass, 30 hectares of coral, 435 hectares of mangroves, 58 hectares of seaweed, 823 hectares of fishponds, 220 kilometers of coastlines, and 16 square meters of coral reefs.
About 6,000 families were also evacuated after the Department of Health detected high toxicity levels in the communities reached by the spill. Residents have complained of dizziness, headache, coughing, rashes, difficulty in breathing, and chest pains. Moreover, fishing has been displaced as the locals’ primary source of livelihood. Some 1,500 townsfolk have been absorbed by Petron’s Ligtas Guimaras program, getting P200 each daily to help in the cleanup effort. Petron and the ship owner are expected to shell out an estimated P1 billion in claims payments to victims of the spill.
The Board of Marine Inquiry has attributed the tragedy to the incompetence of the tankers’ officers, overloading, and bad weather. The tanker’s captain was working on an expired license and lacked chemical tanker experience, while Petron is being held liable for overloading the tanker. A triangular-shaped hole in the bow of the sunken vessel has also raised suspicions of oil cargo theft. The Maritime Industry Authority is set to file administrative charges against the captain, SMDC, and Petron, while the Department of Justice will determine their civil and criminal liabilities. |
