Page 33 - IB May 2021

Oil & Gas

OIL EXPLORATION TALKS REVIVED

IN PALAU

By Bernadette H. Carreon

Proponents behind the efforts to drill exploratory oil and
gas wells in one of Palau’s outlying states are reviving the
plan, optimistic that the administration of President Surangel
Whipps Jr. will back the project.
On May 20, members of the Kayangel State legislature ap-
proved the extension of the license of Palau Pacific Energy
Inc. to drill exploratory wells in Velasco Reef.
Velasco Reef is located in the northernmost part of Palau.
It is a known sanctuary for wildlife, and a seabird and turtle
nesting area. It has an enormous coral reef wildlife habitat
and is teeming with fish life as well.
The revival of the exploration was made possible by the
resolution signed by a majority of the members of the Kayan- Adult and juvenile Greater Crested Terns, resting on intertidal area. Velasco is an
gel State legislature. The resolution extends the agreement important nesting area for these and other species.
Photo: Lightening Strike Productions
between the state and PPE for exploratory drillings.
Former President Johnson Toribiong is helping the PPE get
the venture off the ground anew. He said a permit under Palau’s regulatory framework as set
In an interview, Toribiong said he believes that if the explor- out in the nation’s Petroleum Act is required to do that.
atory drilling findings do strike oil or gas, it will “change the Jordan said PPE’s partner, Palau Energy PTE Ltd, Howard
history of Palau forever.” Smith of Singapore submitted environmental studies and
According to the resolution adopted by the Kayangel State operational plans for the drilling permit in 2015.
on May 13, 2021, the drilling has not commenced due to the Jordan said the endeavour was expensive, and yet the pre-
“refusal of the appropriate agencies of the Government of the vious government has not provided a permit.
Republic of Palau to honour the requirements prescribed by “Unfortunately, after much time with no progress, Mr. How-
the Palau Petroleum Act.” ard Smith has passed away and, due to his death this matter
It also stated that COVID-19 restrictions also caused “un- did not move forward.”
avoidable delays” preventing the company from meeting the He said this time, and hopefully, under a new administra-
drilling deadline. tion, it can continue the work it has begun with Kayangel
Robert Jordan, PPE Inc. President in a letter to Kayangel State.
officials, said that studies commissioned by the company “PPE now looks forward to our continued work with Kay-
suggested that hydrocarbons have been generated “under the angel State, the people of Kayangel, and its able leaders to
flanks of the Velasco area,” and the drilling will determine if obtain an exploration permit and to finally determine if there
oil and gas deposits are present in the Velasco Reef area of are hydrocarbons under Velasco,” he said.
the state waters.” For his part, Toribiong said the oil exploration plans are very
He also said that PPE and its associate have invested over timely, with the Whipps administration’s stated plan to diver-
US$3 million in geophysical, geological, geochemical, envi- sify the economy due to the collapse of tourism.
ronmental, and engineering studies of the Velasco reef and its Palau is a tourism-dependent nation and the COVID-19 bor-
surrounding area. der-related restrictions have upended the country’s economy.
The plan to drill has been on the table since 2002. It’s also a country that is at the forefront of climate change
Toribiong said the delay in drilling has always been political diplomacy, and oil exploration contrasts with the Palau envi-
in nature, despite the presence of a law to govern exploratory ronmental marketing mantra, “Pristine, Paradise Palau.”
drilling. According to the US Energy Information Administration: “al-
Those who opposed the drilling in the past raised concerns though petroleum products make life easier, finding, produc-
about its environmental impacts. ing, and moving crude oil may have negative effects on the
However, Jordan in his letter to the state officials said the environment.”
company “respect and wish to preserve in our efforts with It said however that there are advances in technology that
utmost attention to the environment and maintenance of the could avoid and reduce the effects on the environment.
waters which provide for the welfare of all Palauans.” Toribiong said finding gas in Kayangel could provide Palau
Jordan said the way to find out if the hydrocarbons are with much-needed revenue.
present in the Velasco Reef is to drill a shallow test well, less
than 4,000 feet. editor@islandsbusiness.com

Islands Business, May 2021 33