The Department of Energy (DOE) has formally awarded eight (8) new Petroleum Service Contracts (PSCs) spanning multiple basins across the Philippines. This marks the largest single-round awarding of upstream contracts in the country’s history, aimed at revitalizing domestic hydrocarbon exploration, attracting fresh investment, and strengthening national energy security.

The new contracts cover exploration areas in the Sulu Sea, Cagayan Basin, Central Luzon, Visayas (Cebu Basin / onshore Cebu), Northwest Palawan, and East Palawan basins. Among the awards are the country’s first competitive bid rounds for native hydrogen exploration in Central Luzon, as well as co-managed petroleum contracts in the Sulu Sea in partnership with the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

Key Highlights & Strategic Rationale

• Unprecedented scale: Together, the eight PSCs represent the most extensive package of new upstream contracts in Philippine history to date.
• Basins targeted: The contract areas span key frontier basins that include the Sulu Sea, Palawan basins, Cagayan, Central Luzon, and the Visayas (Cebu region).
• Native hydrogen inclusion: Two of the PSCs (in Central Luzon) are dedicated to assessing the potential for native hydrogen reservoirs — the first such competitive contracts in the Philippines.
• Regional co-management: PSCs in the Sulu Sea (PSC 80, 81) are co-managed with BARMM’s Ministry of Environment, Natural Resources, and Energy (MENRE), reflecting a more inclusive approach to regional energy development.
• Significant acreage: These PSCs cover expansive areas — for example, PSC 80 and 81 encompass ~760,000 and 532,000 hectares, respectively in the Sulu Sea region.
• Work programme expectations: Over a typical seven-year exploration period, contractors are expected to carry out seismic, geological, geophysical, and possible drilling operations. Even prior to commercial production, contractors are tasked with funding local development initiatives, scholarships, and community programs.
• Expected investment scale: The DOE estimates that total contractor commitments during the exploration phase could reach on the order of USD 65–70 million (or equivalent in local currency).
• Strategic timing: With proven reserves from the Malampaya gas-condensate field expected to decline in coming years, the government is accelerating upstream exploration to help close the looming gap in domestic energy supply.

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