PH tapping hydrogen energy among eight new oil service contracts for energy security

Metro Manila, Philippines - President Ferdinand Marcos Jr. led the unveiling of eight new oil service contracts that he said would bring in more than $200 million (around P11.6 billion) in investments and help reduce heavy dependence on imported oil.

The Department of Energy said the contracts cover conventional oil blocks in northwest Palawan, east Palawan, the Sulu Sea, Cebu, and Cagayan, as well as a new hydrogen exploration block in central Luzon.

“We are venturing into the exploration of hydrogen - a clean, zero-carbon source of energy that holds immense promise for our country and for the world,” the president said.

“Even more remarkable, these are the very first service contracts for the exploration of native hydrogen gas in our history. This signals our readiness to lead in sustainable innovation,” he added.

Some of the projects will be co-managed with the Bangsamoro Autonomous Region in Muslim Mindanao, marking a milestone for regional energy cooperation.

The department said the eight contracts are the first the largest batch of oil service contracts awarded in a single period. It added that these are expected to generate about $207 million in investments over a seven-year exploration.

In a speech in Malacanang, the president noted that the country imported almost all of its oil needs, in contrast to local production that contributed only three-tenths of a percent. He added that this made the country vulnerable to “forces beyond our control.”

“At ‘pag nagtaas ang presyo ng gasolina o krudo sa pandaigdigang merkado, ang mga ordinaryong Pilipino ang nahihirapan,” he said.

[Translation: And if prices of gasoline and crude oil increase in the world market, ordinary Filipinos will bear the burden.]

“Sapagkat ang langis ang nagpapagalaw sa ating ekonomiya, mula sa mga sasakyang naghahatid ng pagkain hanggang sa mga pabrikang lumilikha ng kabuhayan. Kapag tumaas ang presyo ng langis, tataas ang pamasahe, ang presyo ng mga bilihin, at halaga ng kuryente,” the president added.

[Translation: Oil is the lifeblood of the economy, from vehicles that deliver food to factories that give livelihood. If fuel prices rise, transport fares will increase, inflation will rise, as well as power rates.]

Energy Secretary Sharon Garin said the contracts reflect renewed investor confidence in the upstream energy sector, especially with the declining output from the Malampaya gas field.

Garin said the service contracts “signify not only our determination to secure new energy sources, but also our readiness to embrace innovation and sustainability while reducing import dependence.”

Marcos said over 46.15 percent of the country’s requirement for natural gas was imported last year, and the rest came from Malampaya.

He said the administration is working to streamline energy permitting through the Energy Virtual One Stop Shop platform to “cut red tape, eradicate bureaucratic delays, and reduce unnecessary paperwork.”

He urged private investors to operate with “integrity, responsibility, and respect for our people,” saying, “Let us prove that responsible enterprise and national development can go hand in hand.”