President Rodrigo Duterte disembarks from a plane upon his arrival at the Vnukovo Military Base Airport in Moscow, Russia on Oct. 2, 2019. Russian giant Rosneft Oil Company needs to enter into a new contract with the Philippine government to develop oil and gas resources in the country, due to an alleged “unauthorized deal,” Malacañang on Oct. 17, 2019 said.
Presidential Photo/King Rodriguez
Palace: Oil deal with Russian firm to start from scratch for proper vetting
Ratziel San Juan (Philstar.com) - October 17, 2019 - 9:35pm

MANILA, Philippines — Russian giant Rosneft Oil Company needs to enter into a new contract with the Philippine government to develop oil and gas resources in the country, because an earlier allegedly “unauthorized deal,” Malacañang said Thursday.

The Rosneft involved then president and CEO of Philippine National Oil Company-Exploration Corporation Pedro Aquino, whom President Rodrigo Duterte on Tuesday told to resign.

“Maganda nga 'yung proposal pero hindi nasunod 'yung stages of bidding and vetting,” presidential spokesperson Salvador Panelo said in a PNA release.

(The proposal is good, but the stages of bidding and vetting were not followed.)

Panelo said Rosneft had to start from the first stage and re-apply to bid.

Applicable policies include the Oil Exploration and Development Act of 1972, Office of the Energy Affairs Circular No. 87-12-003, and Department of Energy Circular No. 94-01-01. The DOE’s “Energy Investors’ Guidebook also lists the requirements and processes involved.

'Cutting corners'

When Duterte flew to Russia earlier this month, he discovered that the PNOC-EC had forged a contract with Rosneft without the knowledge of Energy Secretary Alfonso Cusi, Panelo said.

“Hindi siguro purposely pinaalam. Hindi pinaalam kaya nga siguro nagkaroon ng bulilyaso,” Panelo said.

(It was kept secret purposely. It was deliberately done, that’s why the deal did not push through.)

“Pinapaliwanag sa kanila (Resnoft) na maganda ang proposal nila but they have to go through the regular bidding process. I-vet pa 'yun kasi nga hindi nasunod.”

(We explained to Resnoft that they have a good proposal, but they have to go through the regular bidding process.)

However, Panelo said Rosneft had signed a memorandum of intent to reaffirm its plan of investing in Manila.

Stronger Russian ties

Duterte on October 2 met with Rosneft in Moscow for a possible oil and gas investment in the Philippines.

"We wish to add that the chief executive underscored that any agreement that will be executed or performed for such purpose shall undergo the proper domestic processes and comply with applicable laws and pertinent rules and regulations so as not to leave any room for corruption or irregularity," presidential spokesperson Salvador Panelo said.

Improved ties between the Philippines and Russia was acknowledged by Duterte in a separate October 2 meeting with Russian Prime Minister Dmitry Medvedev.

“We are intent to sustaining this momentum. I am confident we'll succeed as I see strong commitment and will from both sides to bring our relation to an even greater level,” Dutetre said in a release.

PHILIPPINES-RUSSIA TIES RUSSIAN OIL
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