Achoy, Vonn Joebert B.

Dacsil, John Chrismark B.

Oil Resource - Crude Oil Reserves issue in the Philippines

I. INTRODUCTION
A. Background Information
1. General background information that grabs attention (reference)

The Philippines' initial impact of increasing oil and gas prices is a "shock" to
commodities prices. According to JPMorgan Chase & Co. and Business World, rising oil
prices might hamper growth in Southeast Asia, particularly in the Philippines.

Reduced Purchasing Power

When commodity prices are high and household income is the same, the family
has less disposable money. In other words, a household's steady income would allow
for fewer purchases. For example, your prior shopping budget may provide you with a
month's worth of food and other necessities. When commodity prices are high, however,
this may only equate to two weeks' worth of commodities for the same price.

Commodity prices have risen.

Given that oil prices are linked to other commodities in the market, price
increases imply a greater cost of living. In addition to spending more for the same
quantity of gasoline, food, fares, and other daily expenditures may climb.

SRP Variations

However, according to Trade Secretary Ramon Lopez, the suggested retail prices
(SRPs) of essential items should remain unchanged for the time being. However, it is a
possibility that cannot be ruled out in the future.

Increased Fares

Furthermore, rising oil prices have a direct impact on the transportation industry.
Aside from needing additional money to cover oil expenses, public transportation
organizations are concerned about drivers' take-home compensation. As a result,
they're now campaigning for a "conservative fare rise."

2. More specific background information to lead into the thesis (reference)

 Crude oil reserves for the Philippines was 0.92 thousand barrels per day. Crude
oil reserves of the Philippines fell gradually from 0.95 thousand barrels per day in
August 2021 to 0.92 thousand barrels per day in July 2022. Proved reserves of crude oil
as of January 1 of the report year are the estimated quantities of all liquids defined as
crude oil, which geological and engineering data demonstrate with reasonable certainty
to be recoverable in future years from reservoirs under existing economic and operating
conditions.
Crude oil means a mixture of hydrocarbons that exists in liquid phase in natural
underground reservoirs and remains liquid at atmospheric pressure after passing
through surface separating facilities.Liquids produced at natural gas processing plants
are excluded. Crude oil is refined to produce a wide array of petroleum products,
including heating oils; gasoline, diesel and jet fuels; lubricants; asphalt; ethane,
propane, and butane; and many other products used for their energy or chemical
content.

B. Thesis statement (Present this in a sentence format)

Crude oil reserves issues in the Philippines.The Philippines intends to maximize

its oil and gas resources, and will keep the tax breaks in the energy sector to attract
more investors. Some of the oil and gas are found in the disputed Spratly chain of
islands, where active oil fields now supply the rest of the country; other prospective
deposits are thought to be found inland and offshore waters, including those in the
northern province of Cagayan, Ragay Gulf in Bicol, offshore Mindoro, the new Palawan
block, northern Cebu, and the Cotabato Basin. According to a new analysis, the
Philippines is "sitting" on a gold mine of undeveloped hydrocarbons worth $26.3 trillion.
This is a mostly unsubstantiated assertion, yet it is noteworthy.

II. BODY
A. Support Paragraph 1

1. According to a statement from Marcos, the Energy Department has

granted Nido Petroleum Philippines Pty Ltd permission to move on with
the site assessment of its drilling locations this quarter, clearing the way
for the drilling of two wells in the first half of 2023. Nido Petroleum is a unit
of Australian firm Sacgasco Limited.The Cadlao oil field off the nation’s
western coast may see early oil production toward the second half of
2023, he said. Recoverable volumes from the oil field are expected at 5 to
6 million barrels.Marcos has pledged to prioritize energy security and
lowering power costs, as imported oil fans inflation. In addition to
 attempting to reach an agreement with Beijing on oil exploration in the
contentious South China Sea, his administration has begun fuel
negotiations with Russia.

2. To ensure the country's oil supply security and price stability, the
government-run Philippine National Oil Co. (PNOC) wants to move
forward with the creation of a strategic petroleum reserve (SPR) and an
interim oil stockpiling program. For its SPR program, PNOC has issued a
request for proposals for a negotiated acquisition of transaction advisory
services.The SPR, also known as a strategic oil stockpile, is an
emergency fuel reserve of oil and petroleum products kept by either public
or private organizations, or both, and released during times of regional or
global disruptions in the oil supply.

3. At the end of 2019, the Philippines had a 276,000 b/d capacity for refining
crude oil. In the municipalities of Tabango and Limay, respectively, a
refinery is run by Petron Corporation and Pilipinas Shell Petroleum
Corporation, both of which are Shell subsidiaries. Following the outbreak
of the novel coronavirus (COVID-19) and a subsequent drop in demand
for refined products, Shell temporarily shut its Tabango refinery in May
2020. Due to product oversupply and intense competition from other
refineries in the area, Shell announced plans to permanently close the
refinery in August 2020.The nation's reliance on imports of refinery
products will probably increase as a result of the plant's closure.

3. Summarizing/Concluding/Transition sentence.

The immediate impact of rising oil and gas prices in the Philippines is a "shock"
to commodity prices. Rising oil costs, according to JPMorgan Chase & Co. and
Business World, might stifle growth in Southeast Asia. Aside from paying more for the
same amount of gasoline, food, fares, and other daily expenses, they may rise. In July
2022, the Philippines' crude oil reserves were 0.92 million barrels per day. The
recoverable quantities from the Cadlao oil field are projected to be in the 5–6 million
barrel range. Nido Petroleum Philippines Pty Ltd has been granted clearance by the
Energy Department to proceed with the site evaluation of its drilling locations.

The Philippine National Oil Company (PNOC), which is administered by the

government, wishes to proceed with the establishment of a strategic petroleum reserve
(SPR) and an interim oil stockpiling program. PNOC has issued a call for bids for a
negotiated procurement of transaction consulting services for its SPR program. The
Philippines had a crude oil refining capacity of 276,000 b/d at the end of 2019. The
Philippine government is taking steps to increase the country’s energy security and self-
sufficiency by constructing an SPR and an interim oil stockpiling program

4. References

1. EPA (December 12, 2022)

https://www3.epa.gov/carbon-footprint-calculator/tool/definitions/crude-
oil.html#:~:text=Crude%20oil%20means%20a%20mixture,passing%20through
%20surface%20separating%20facilities

2. Camella (March 25, 2022)

https://www.camella.com.ph/oil-price-hike-what-it-means-for-the-philippine-
households-and-economy/

3. Philippines Crude oil reserves (December 12, 2022)

https://knoema.com/atlas/Philippines/topics/Energy/Oil/Crude-oil-
reserves#:~:text=In%20July%202022%2C%20crude%20oil,per%20day%20in
%20July%202022.

4. Philippines to Maximize Oil and Gas Resources (October 11, 2022)

https://www.bloomberg.com/news/articles/2022-10-11/philippines-to-maximize-
oil-and-gas-resources-marcos-says?leadSource=uverify%20wall

5. Philippines to Maximize Oil and Gas Resources (October 11, 2022)

https://www.bloomberg.com/news/articles/2022-10-11/philippines-to-maximize-
oil-and-gas-resources-marcos-says?leadSource=uverify%20wall

6. PNOC seeks creation of strategic petroleum reserves (August 07, 2022)

https://www.philstar.com/business/2022/08/08/2200998/pnoc-seeks-creation-
strategic-petroleum-reserves

7. U.S. Energy Information Administration - EIA - Independent Statistics and

Analysis (December 12, 2022)
https://www.eia.gov/international/analysis/country/PHL

8. Oil & gas found in the Philippines: What you need to know (March 29, 2022)
https://gulfnews.com/business/energy/oil--gas-found-in-the-philippines-what-you-
need-to-know-1.1648479895075