By Sheldeen Joy Talavera, Reporter
THE upstream oil and gas sector is starting the year on an optimistic note, with industry players set to begin their work programs after securing new petroleum service contracts from the government.
“The year 2026 marks a new era for the Philippines’ upstream oil and gas industry — one of renewed exploration, energy innovation, and investor confidence,” Edgar Benedict C. Cutiongco, president of the Philippine Petroleum Association, told BusinessWorld.
He said newly awarded onshore and offshore petroleum service contracts are expected to begin their approved exploration and development activities this year, “bringing in vital investments and reinforcing the country’s role in regional energy security.”
Last year, the government awarded eight new petroleum service contracts, representing potential investments of about $207 million over seven years of exploration.
Areas with identified potential petroleum and hydrogen resources include the Sulu Sea, Cagayan, Cebu, Northwestern Palawan, Eastern Palawan, and Central Luzon.
Under their service contracts, companies may undertake work programs that include geological and geophysical studies, seismic surveys, and drilling activities, as appropriate, to assess resource potential.
The government has also recently granted a new contract to PXP Energy Corp. and its partners, allowing them to continue production at the Galoc Oil Field off northwest Palawan.
The new contract replaces Service Contract 14C-1, which expired on Dec. 17 and covered the exploration, development, and production of petroleum resources in the Galoc field.
Since the issuance of Presidential Decree (PD) No. 87 in 1972, which promotes the discovery and development of the country’s indigenous petroleum resources, a total of 65 million barrels of oil have been discovered from various oil fields, Mr. Cutiongco said.
“PD 87 remains a cornerstone of fiscal stability for the upstream sector. Any future adjustments to PD 87 will be carefully considered to enhance incentives and maintain the Philippines’ competitiveness as an investment destination,” he said.
He added that the awarding of the development and production petroleum service contract for the Galoc field ensures that remaining reserves are developed and resources are not stranded.
“Fiscal stability remains the bedrock of growth. Strong interest in recent bidding rounds signals renewed confidence, even as global risks persist,” Mr. Cutiongco said. “The shift from globalization to regionalism will define energy strategies — and the Philippines is ready.”