Philippine Resources Mining, Petroleum & Energy Journal Issue 2, 2015
Renewable Energy Act of 2008-Seven Years After
What effect the crash of oil prices may have on Philippine’ move to renewable energy?
Diwata in Didipio/ The return of the Solar lolas
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Headlines in this issue
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Front cover: Will renewable energy play a growing role in the Philippines’ energy future?
24
Resources Commentary 8
“Ronnie” Penarroyo reviews Renewable Energy Act of 2008 – Seven Years After
16
Patricia A. O. Bunye provides an update on the visit of Diwata in Didipio and the return of the Solar Lolas
22
Ruth Yu-Owen examines what effects the oil price fall may have on Philippines’ renewable energy push
Economic Commentary 24
A new report says opportunities prevail in SEA offshore oil & gas services market
26
Tracing the Success Story that is the Philippine Economy
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32 28
Fourth Arangkada Forum looks at Asia’s Rising Tiger
32
ANZCHAM President Grealy Steps Up
40
Mining Briefs
44
Energy News
Editor’s Note
Philippine Resources Mining, Petroleum & Energy Journal Issue 2 2015 Philippine Resources Journal is published independently for executives in Philippine mining, petroleum and energy and associated business sectors. PUBLISHER Elizabeth Galura Charismatic (WA) Pty Limited
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Energy use, energy demand and the development of renewable options a major focus in this issue
I
n this issue of Philippine Resources we have a real focus on energy issues, a timely review with the world energy sector in turmoil due to the
collapse of global crude oil prices and uncertainty clouding the future of nuclear energy and, in some
CONSULTING PUBLISHER Greg Brimble
cases, renewables.
EDITOR: Colin Sandell-Hay
While the Philippine economy continues to impress as one of the fastest growing in the world, there is no doubt that reliable and cost effective energy supplies remain critical if the country is to live up to its potential.
SALES AND MARKETING Kevin Lewis (kevin@philippine-resources.com) Cecilia Pamular (cecille@philippine-resources.com) Matthew Brimble (matthew@philippine-resources.com) DESIGN/PRODUCTION Elizabeth Galura JOURNALISTS Maria Paula Tolentino Kevin Lewis CONTRIBUTORS Patricia A.O. Bunye Fernando Penarroyo ___ MANILA PUBLISHING OFFICE Lomar Offices Paseo de Roxas Bldg, 3rd Floor 111 Paseo de Roxas Legaspi Village Makati, Metro Manila, Philippines Phone +632 815 8836 or +632 714 0029 INDIVIDUAL CONTACTS Greg Brimble greg@philippine-resources.com Australia: +614 172 20759 Manila: +63949 338 3664 Matthew Brimble matthew@philippine-resources.com Manila: +63 927 721 6622
Digital online edition available at www.Philippine-Resources.com Subscribe to our e-newsletter; email info@philippine-resources.com
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A number of our feature articles in this issue look at a number of the energy opportunities available to the country including renewables and fossil fuels and examines whether they are being developed effectively. Regular columnist Fernando “Ronnie” Penarroyo takes a close look at the Renewable Energy Act of 2008 and also finds that the Philippines has some of the most expensive electricity prices in the world, opening the door for renewables to play an increased role in meeting future deman. Another of our regular contributors, Patricia A. O. Bunye, looks at a number of issues, including the return of the “Solar Lolas” and their work to expand the use of renewable energy in poorer areas. Meanwhile, Ruth Yu-Owen discusses what effect the fall in oil prices will have on the potential growth of renewable energy developments in the country, and reports that international experts warn that the drop in world oil prices should serve as reminder for countries like the Philippines to “expand their energy mix and take renewable energy projects more seriously.” In another article, a new report finds that despite the oil-price situation, the South East Asia offshore oil and gas services market managed to generate revenues of US$25 billion in 2014. And yet, another report has underscored the Philippines’ need to discover another Malampaya gas field and suggest it “must be a national priority” with the depletion of natural gas from the deep water gas-topower project looming in 2024. And of course, we take a close look at all the key economic information, minining and oil and gas activity and company news in your Philippine Resources.
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Renewable Energy Act of 2008 – Seven Years After By Fernando Penarroyo
Introduction
W
ith a population of almost 100 million people and annual economic growth averaging between 6 to 7%, the Philippines is anticipated to continue to have a robust energy demand. The Government’s refusal to subsidize power, heavy reliance on expensive fossil fuel imports, and added transmission cost because of the country’s archipelagic configuration have resulted in electricity prices being among the highest in the world. Thus, renewable energy (“RE”) projects present a viable business opportunity to resource developers. The business community believes that
the introduction of retail competition and open access is the logical move to bring the power industry to the next level and establish a competitive market structure. There is a need to further diversify the energy mix and the government is banking on renewable energy to wean the country from its dependence on fossil fuel. The government through the Renewable Energy Act of 2008 (“RE Act”) sought to address the issues on the absence of a ready and guaranteed market for the output of RE power plants and the recovery of investments through electricity tariffs. While the DOE vowed to speed up support systems for RE development, progress has been slow, as the DOE admitted that implementation of the RE Act policy reforms has been hobbled by regulatory delays.
Resistance from many stakeholders - governmental, private, and utilities, among others - has caused further delays, which has been the primary challenge in renewable energy development for the country. The DOE still has to come up with renewable portfolio standards that will set the capacity needed from each RE technology, as well as the mechanics to connect the main grid to all operational RE plants. Status of Feed-In Tariff The Energy Regulatory Commission (“ERC”) only established in July 2012 the Feed-In Tariff (“FIT”) rates applicable to each type of renewable energy resource but were significantly lower than those applied for by the National Renewable Energy Board. The Philippine Department of Energy (“DOE”) approved installation “targets” of 250MW for run-of-river hydro, 250MW for biomass, 200MW for wind, 50MW for solar PV and 10MW for ocean technology in 2011. In February 2013, the DOE announced a “first-come, first-served” policy in respect of entitlement to the FIT, which was subsequently confirmed through the issuance on 28 May 2013 of DOE Department Circular No. DC 2013-05-0009, or the Guidelines for the Selection Process of Renewable Energy Projects under Feed-In Tariff System and the Award of Certificate for Feed-In Tariff Eligibility (the “Eligibility Guidelines”).
Fernando “Ronnie” Penarroyo is the Managing Partner of Puno and Penarroyo Law (fspenarroyo@punopenalaw.com). He has negotiated numerous land access agreements with local government units, landholders, indigenous peoples and host communities on behalf of land development, mineral and energy companies.
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The 20-year FITs introduced in 2012 are now considered among the highest in the region. Wind projects, for example, receive PHP8.53/kWh (US$0.203), while solar attracts PHP9.68kWh (US$0.230). Continued on page 10 >
Resources Commentary
< Continued from page 8 However, the cumulative capacity eligible for FITs is capped with tariffs subject to review after a three-year period or when the cap is reached. FITs are available on a “first come, first served” basis, with oversubscribed projects relying on bilateral agreements with an Independent Power Producer or the wholesale spot market. Critically though, projects can only apply for the fixed tariffs once construction is eighty percent (80%) complete. FIT values will decline over time to ensure that projects are moved and optimized rapidly, thereby protecting consumers and preventing speculators. A significant impediment arises from the rules, which requires that 80% of the facility be built before the owner may even apply for the FIT, after which the FIT could still be denied. Strong developer interest and the growing power shortage prompted the ERC to rethink its position in 2014. The ERC is expected to further adjust the rates in early 2015, with new solar FIT rates projected to be reduced to P8.5-P9 ($0.18$0.19) per KWh.
Large-scale, reservoir-based hydropower and geothermal projects are not included in the FIT scheme due to their ability to economically match with conventional fossil fuel-fired power plants. The DOE will continue the “first-come, first-served” approach. Under the Eligibility Guidelines, upon a project being declared commercially viable, a developer must compete with other project proponents in building a renewable energy facility before being awarded a feedin tariff. However, the wisdom of the DOE adopting the “first-come, first-served” principle for certifying eligibility is widely debated. Supporters of the guideline’s principle argue that it prevents speculative developers that have no intention of completing a proposed RE project financial gains by selling the RE installation target allowances allocated to them to genuine developers at an inflated price. The act of allocating limited eligibility certificates to developers provides the opportunity to speculators, once the installation target is fully subscribed, to arbitrage the allowances as financial derivatives driving costs up and, passing it to consumers.
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However, the guidelines discriminate against small start-up enterprises and support only those large companies that have the financial wherewithal to maintain the long-term financing to build an RE plant without the assurance of eligibility of FIT rates. With no firm FIT allocation, small developers have found it difficult to obtain financing from banks given their reluctance to lend money for projects in a relatively untested market. [See “The Philippines: An Update on the Country’s New Feed-In Tariff” (2013)]. Consumers have started to pay, starting January 2015, an additional P0.0406 per kilowatt-hour (kWh) in electricity rates, representing so-called feed-in tariff allowance (FIT-All). The rate will be collected from electricity end-users and will be reflected in their electricity bills as a separate item, as mandated by the RE Act. RE Attractiveness Index In Ernst and Young’s latest Renewable Energy Attractiveness Index published in March 2015, a looming energy crisis in the Philippines is providing an impetus on the development of the country’s renewable energy resources, with high power prices, a relatively attractive FIT regime and liberalized electricity market creating solid foundations. The country ranked 32nd out of 40 countries being monitored for macro, energy market, and technology-specific drivers. The Philippines was among those cited in the report due to three factors, namely: its “ambitious renewables targets, stable incentive regime, and high energy demand driven by a large and growing population.” The report further stated that a sixteen percent (16%) increase in generating capacity has failed to keep pace with a fifty percent (50%) rise in consumption, Continued on page 12 >
10 Philippine Resources
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under the Local Government Code. The clearances, permits and endorsement procedures under these two laws also add to the transaction cost. The Philippines archipelagic geography means that the transmission and distribution of electricity is expensive. The lack of available transmission capacity has been a major impediment to building new generation. Any major power plant must take on the cost, risk and responsibility for building its own connection to the grid without adequate assurance of repayment.
< Continued from page 10
prompting a major power shortfall expected in 2015. FITs for renewables projects are among the highest in the region but are subject to relatively stringent conditions and caps. It noted however that a forty percent (40%) cap on foreign ownership has deterred some investments to date.
However, the business community believes that amending EPIRA is not the solution to the high cost of electricity. They believe that amendment of the law will make the investors/lenders wary and uneasy, as it will project volatility in the regulatory environment. Recommendations made by business groups include reviewing or modifying the WESM Rules and strengthening the capability of the market regulators like the DOE and ERC.
Challenges The permitting process and transmission capacity remain to be the biggest challenge in the RE industry. There is a pending legislative proposal to amend the Electricity Power Industry Reform Act (“EPIRA”) to address the skyrocketing power rates. According to the Chair of the House Committee on Energy, Rep. Reynaldo V. Umali (Oriental Mindoro, 2nd District), “While the Executive is empowered by the EPIRA to ensure power supply security, it is incumbent upon Congress, exercising its oversight powers through the Joint Congressional Power Commission, to conduct a thorough review of the implementation of EPIRA, the rules and regulations of the Energy Regulatory Commission, and the Wholesale Electricity Spot Market (“WESM”).” 12 Philippine Resources
The slow process for approval of power projects under the single buyer Power Purchase Agreement-based regime can be addressed by shortening the procedures and requirements for permitting. Based on industry experience, it takes the National Grid Corporation of the Philippines at least 18 months to finish a Grid Impact Study, the Department of Environment and Natural Resources at least 2-3 years to issue an Environmental Compliance Certificate, and ERC around 12 months to process the review of the Power Supply Agreement. In addition, the government needs to address the perceived veto powers on energy and power projects of indigenous peoples under the Indigenous Peoples Rights Act and local government units
Often, this aspect of the project is more challenging than constructing the power plant itself, and remains a major cause of concern for lenders, especially with respect to the timely acquisition of rightsof-way. To meet the challenges brought about by lack of transmission infrastructure, delays in grid connection, and curtailment of output in locations where current policies and grid management systems undermine integration, government guarantees on electricity dispatch or priority connection must be put into place. Most lenders and many investors will require evidence of executed generation interconnection and/or transmission service agreements as a condition of financing. A loan guarantee program for electric transmission infrastructure expansion would support large-scale capital investment and would serve as a cost reduction and risk mitigation tool. [Geothermal Risk Mitigation Strategies Report, Deloitte Development LLC (2008)] Institutional coordination and technical capacity are the main non-financial barriers. The challenge will be to properly mobilize all stakeholders involved in the sector through engagement and public participation. In addition, coordinating decision making and project planning processes, and ensuring the technical and human capacContinued on page 14 >
Resources Commentary
< Continued from page 12 ity exists by involving beneficiaries in the development stages, operation and maintenance of projects will help strengthen the sector. [Meeting Renewable Energy Targets: Global Lessons From the Road to Implementation, The World Wide Fund for Nature (WWF) in collaboration with World Resources Institute (2013)] Policy Consideration for RE Regulators As with any major resources venture, the path from concept to completion/operation is an arduous exercise, which remains especially true for RE developers in the Philippines. The DOE’s initiative in pushing for a law that will recognise projects of national significance is a welcome development as a number of energy projects such as exploration contracts and transmission lines cannot move forward because of local opposition. Congress must promulgate a new law in extreme urgency that will set the parameters for “energy project of national significance.” Government should
14 Philippine Resources
also give assurance that expropriation measures are available as may be necessary, over private lands relevant to the project electricity transmission. The energy agencies need to take a more cross-sectoral approach to involve other departments and institutions. Laws are in place but implementation is weak. There is also a tendency for laws to be subjected to conflicting interpretations among turf-protecting government agencies. Efforts must address the administrative bottlenecks and allegedly weak enforcement of antitrust laws that have slowed both market reform and the pace of deployment. Market barriers affect RE development due to inequitable market and policy structures. Fossil fuel power generation does not internalize full social and environmental costs. A serious barrier is the fact that deployment of fossil fuel plants have a shorter lead time, making them more attractive to a power-hungry economy but with no allowance for environmental externalities.
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This places RE at a commercial disadvantage but this can be resolved by regulating and internalising the associated cost of greenhouse gas emissions, noise and air pollution. The government should also expand the efforts of multilateral and bilateral aid organizations to address economic and non-economic barriers, as renewables must often compete against “hidden” subsidies for conventional fuels. Foreign ownership issues have also dampened enthusiasm in some largescale investments. Government must be unequivocal in easing ownership restrictions to foreign capital and exert more political will in its efforts to mitigate social and environmental concerns. Government policy should be open to fast-paced development of technology in providing the legal cover and additional incentives to private investors and ultimately induce the much-needed developmental growth. Continued on page 16 >
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Diwata in Didipio and the return of the Solar Lolas By Patricia A. O. Bunye
(MJ) G. Josue, Communications Officer.
D
The highlight of the Women’s Day 2015 celebration was a forum with the theme “#Make it Happen: Women in Resource Development.” David Wray, General Manager of OceanaGold, welcomed the participants by means of a videotaped message delivered entirely in Filipino.
iwata-Women in Resource Development, Inc. (Diwata) celebrated Women’s Day 2015 with a visit on 09-11 March 2015 to OceanaGold Philippines, Inc.’s minesite at Barangay Didipio, Municipality of Kasibu, Nueva Vizcaya, approximately 270km north of Manila. OceanaGold’s FTAA001 straddles a mountainous region between the provinces of Nueva Vizcaya and Quirino. Had OceanaGold not kindly arranged for our air travel from Manila to Cauayan, Isabela, our group of 6 Diwatas would have needed to travel by land for at least 8 hours. Our visit and the Women’s Day 2015 celebration was made possible through the efforts of the following OceanaGold Diwatas: Atty. Joan D. Adaci-Cattiling, SVPLegal and HR (member, Diwata Board of Trustees); Ms. Lucita (Lucy) M. Exconde, Sustainability Manager; and Marie Joy
Lucy Exconde gave an overview of the “Women of Didipio.” Of OceanaGold’s 502 employees, 16.5% are women in various roles in mining, processing, community engagement. Of these women, 17% are in managerial roles, more than 36% are professionals, while the remaining 47% are in the rank and file. The biggest number of women come from the Process Department, with the commercial and external relations teams coming in second and third. The panelists were women employees of OceanaGold, namely: Simplicia Ananayo (Community Relations Supervisor); Alyssa Rodolfo (Metallurgist); Mathy Lou Domingo (Mining Engineer); Myra Gulinao (Senior Mine Surveyor); and Marina Bartolome (Delta truck driver).
< Continued from page 14 Conclusion RE investments in the country will be driven by the combination of a strong energy supply imperative, increasingly liberalized energy sector, ambitious capacity targets and a relatively stable renewable energy off-take mechanism. However, the government may have been overly optimistic in its projections of additional potential capacity of proposed RE projects under the new contractual regime in the RE Law. These may be due to the over-estimation of the resources or failure to take into consideration the regulatory delays and the permitting process involved in putting the projects on-stream. The Philippine resources bureaucracy is perceived as one 16 Philippine Resources
They were joined by two geologists from Diwata: Eliza (Ging) Laudencia (of the UP National Institute of Geologic Studies) and Jocelyn Galapon (a consultant of Philex). Each one shared their professional and personal journeys, as well as the rewards and challenges of being a woman in a traditionally man’s world. Women from OceanaGold’s host community also participated and shared their insights. Craig Fawcett, OceanaGold’s Mine Manager, delivered the closing remarks and led the company’s male employees in handing roses to all the female employees in simple recognition of their valuable contributions to the company’s success. Community integration In the three days we spent at Didipio, we were struck by how the local community has been integrated into the company’s operations. OceanaGold has assisted its host comContinued on page 18 >
prone to create political barriers associated with regulatory and policy issues, which causes market uncertainty and cautious investment approaches. Lack of policy continuity creates an ambiguous view of economic certainty. Any investment made under lingering policy issues is exposed to the numerous reviews and potential changes, which may take place during the lifetime of the project. The regulatory uncertainty makes financing difficult. Needless to say, good governance goes hand in hand with investment promotion. Inviting participants to the RE sector is not the end. What is more important is for the government to assure investors that they are able to access the resources within the time frames set under the contracted work programmes.
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< Continued from page 16 munity in establishing the Didipio Community Development Corporation (DiCorp), which is owned by the residents of Didipio. DiCorp employs over 300 employees from Didipio and provides mine services such as farm-to-market access road maintenance, housekeeping, catering, laundry, waste and recycling, employee transport and construction equipment hire services, concentrate loading and handling and camp maintenance. At the cafeteria where we took our meals during our stay, the food was cooked and served by employees of DiCorp. We were likewise driven around the mine by DiCorp employees in vehicles owned by DiCorp. It is therefore not surprising that DiCorp is the fastest growing business in the province of Nueva Vizcaya. Naysayers who allege that mining operations do not directly benefit the host community need only to look at the example of DiCorp, which through its long term contracts with OceanaGold makes sustained enterprise development in the
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community possible.
by teaching them how to harness solar power to light up their communities.
*** Barely a week after the OceanaGold visit, on 16 March 2015, Diwata welcomed back to the Philippines the four Aeta grandmothers (aka the “solar lolas”) who were sent to the Barefoot College in India to be trained under its “Tanging Tanglaw: Turning IP Grandmothers Into Solar Engineers” project. The solar lolas’ return has generated much interest from the media and the general public. They have landed on the front pages of our national newspapers and have been featured in major news programs. “Tanging Tanglaw” is a collaboration among Diwata, the Philippine Mine Safety and Environment Association (PMSEA) and the Land Rover Club of the Philippines (LRCP) (collectively, the “Project Partners”), with the support of the Embassy of India in the Philippines, which aims to empower indigenous people (IP) women, particularly grandmothers (i.e., mature women who are no longer the primary caregivers of their families)
The project involves sending illiterate and unskilled women to the Barefoot College in Tilonia, India to attend a sixmonth training course on solar engineering, specifically, fabricating, installing, repairing and maintaining solar lighting equipment. The Barefoot College was founded by Sanjit “Bunker” Roy, named one of TIME magazine’s most influential people in 2010. The Barefoot College provides training in, among others, solar technology in the belief that even the uneducated poor have the right to use technologies to improve their life and skills. Based on the many years of experience of the Barefoot College, women, rather than men, are specifically chosen because, after receiving their training, the women return to their villages to influence daily life and play a major role in their development rather than migrating to other places as men or younger community members might.
Continued on page 20 >
OceanaGold’s employees, members of the community and Diwatas Women Celebration Panelists with Diwata President Patricia Bunye. (Photo courtesy of OceanaGold)
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More urgently, the Project Partners are now raising the amount of USD58,000 (approximately PhP 2.6 million), which need not come from any single contributor, for each community of 100 households. This amount will cover, among others, the required number of household solar systems, which consists of: 40 watt solar panel; wiring; wall-mounted charge controller; waterproof battery box with battery (sealed gel battery new technology); three LED wall lights; 1 mobile phone charger (universal); 1 large solar portable lantern with separate panel for charging; and share in workshop tools and supplies and spare parts. The Solar Lolas. < Continued from page 18 The Project Partners arranged the logistics and assisted the Barefoot College and the government of India in selecting a group of four Aeta women, namely, Evelyn Clemente, Sharon Flores, Cita Diaz and Magda Salvador, to undergo a six-month, live-in training at the Barefoot College. Evelyn and Sharon are from Gala, Zambales, while Cita and Magda are from Bamban, Tarlac. During their six months of training at the Barefoot College with other women from different countries, the four grandmothers experienced an amazing personal transformation. They learned solar engineering and other livelihood activities, such as making mosquito nets and sanitary napkins. Learning complex new concepts and interacting with people of different cultures built their self-confidence and fueled their desire to be agents of positive change in their villages. Upon returning to their respective villages, each pair of solar grandmother will be responsible for solar electrifying 100 households. In the case of Bamban, Tarlac, electrifica20 Philippine Resources
tion is currently non-existent and most of the households use kerosene lamps for lighting.
The response to Tanging Tanglaw remains enthusiastic and the Project Partners hope they can successful implement the project in Zambales and Tarlac, and send more trainees to the Barefoot College in the future.
On the other hand, electricity is available in Gala, Zambales, but not all the families avail of it. The solar grandmothers will assume the responsibility for installing and maintaining the solar panels and lamps for a minimum of five years. Once the communities are solar-electrified, qualitative improvements in the communitiesâ&#x20AC;&#x2122; standard of living are expected, as the members will be able to use electrical appliances and gadgets, enabling them to become more productive. The children, in particular, will be able to study at night, learn to use computers and possibly access the internet. The Barefoot College will, in due course, provide e-learning modules to the children. The Project Partners are working with the local elders and community members in order to help them understand that the solar lighting system follows a community ownership model and that each family, regardless of how poor they are, must contribute money (i.e., what they are currently spending on kerosene or for charging their mobile phones outside the community) and time to maintaining the system.
Patricia A. O. Bunye is a senior partner at Cruz Marcelo & Tenefrancia and head of its mining and energy practice. She is also President of Diwata-Women in Resource Development, Inc. Questions and comments are welcome at po.bunye@cruzmarcelo.com.
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What effects may oil price fall have on Philippine renewable energy push?
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ill the plunge in world oil prices negate gains achieved in the Philippine renewable energy sector? Oil prices plunged by more than 50 per cent in the last quarter of 2014 to around US$50 per barrel. And as oil prices has remains volatile, it is important to look at the Philippines’ power generation mix for guidance and look at the role of oil in power generation. The Philippine Energy Plan 2012-2030 showed the oil-based power plants accounted for 19 percent of the country’s installed capacity in 2011. In terms of total generation, oil-based plants accounted for only 4.8 per cent. On the other hand, natural gas, cornered bulk of power generation in 2011 at 29.8 per cent, followed by geothermal at 14.4 per cent, hydra at 13.7 perc ent, solar at 0.2 per cent and wind at 0.1 per cent. Coal, meanwhile, accounted for the biggest share in the power generation mix at 37 perc ent. A few years ago, the Philippines has al-
ready initiated moves to reduce the government’s consumption of oil-based fuel amid the increase in world oil prices. This move may bode well for the Philippines today as the country is no longer dependent on oil for the power generation sector, compared to the transport sector where more than 90 percent of the country’s fuel consumption relies on imports. Most of the diesel plants today are used to serve the grid’s peaking requirements. Diesel plants also continues to serve as the primary power generator in the missionary areas, although state-owned National Power Corp. has been promoting the use of renewable energy in the SPUG (Small Power Utilities Group) areas. Eight years after the passage of the Renewable Energy Act, the declining prices of solar panels and wind turbines have helped promote renewable energy usage. The development of new technologies, intense competition and high demand has helped bring down solar panel and wind turbine costs.
And if long-term investors and energy experts are to be believed, oil prices are not expected to stay low forever. Oil prices are, and will continue to be, volatile depending on a number of external factors including supply and demand, Middle East conflicts, among many others. Renewables, however, have its advantages because long-term investors can look in on their costs for the next 20 years and are less exposed to price volatiles. International experts, in summary, say the drop in world oil prices should serve as reminder for countries like the Philippines to “expand their energy mix and take renewable energy projects more seriously.”
Government’s continuing commitment to promote renewable energy such as the Department of Energy’s push of approving more renewable projects despite the limited installation target and the implementation of the feedin tariff allocation are also expected to give a boost of the Philippine renewable energy sector. Meanwhile, as the Philippines remains one of the Asean countries with the highest cost of electricity, the push for renewable energy is not expected to let up.
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Power consumers will increasingly look at alternative sources of electricity sources such as solar rooftop installations. Most buildings and new housing units are now pushing for solar rooftop installations to entice homeowners to invest in green technology.
Ruth Yu-Owen is the President and CEO of PhilCarbon, a leading renewable energy project developer and a keen observer of regional developments in energy.
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Report: Opportunities prevail in SEA offshore oil and gas services market
T
he South East Asia offshore oil and gas services market had witnessed a growth rate of 15 per cent from 2010 to 2013 due to inflated oil prices, which increased the export value of fossil fuels and the overall high domestic demand for energy in the region. With the ongoing oil price slump, however, O&G exploration and production activities have been greatly affected, slowing down the development of the related services market. New analysis from Frost & Sullivan, South East Asia Offshore Oil and Gas Services Market finds that the global drilling, marine and pipeline support service markets collectively earned revenues of US$200 billion in 2014 and estimates this to reach US$241 billion in 2018.
“Despite the oil-price situation, the South East Asia offshore O&G services market managed to generate revenues of US$25 billion in 2014,” according to Daniel Wicaksana, Frost & Sullivan Energy & Environmental Consultant. “A lot of different players ranging from large multinational companies to medium- to small-sized regional and local companies have been driving total market revenues,” he added. Wicaksana said that as the shallow water oil fields in Asia start to mature, O&G companies are facing the pressure of declining production. As a result, O&G companies based in countries such as Malaysia and Indonesia are developing deepwater fields. With Malaysia and Indonesia witnessing the highest exploration activity in South East Asia, these countries will become
the largest markets for O&G offshore support services and pipeline services. “Nevertheless, existing challenges such as tackling the high risks of working in remote locations, extreme weather, and shortage of highly skilled human resources could reduce deepwater drilling to some extent. “This, along with the need for offshore O&G service providers to comply with complex government regulations, could negatively impact the market growth,” Wicaksana said. “Moreover, the combined effect of increasing vessel and rig production by low-cost Chinese shipbuilders and falling oil prices have resulted in the rise of unused marine support vessels. The drop in utilisation rates of drilling rigs and marine support vessels are forcing major companies operating in this segment to reduce the price of their products to sustain themselves in the highly competitive market.” He pointed out that long-terms plans by South East Asian countries to strengthen energy security and sustainability will eventually promote offshore O&G exploration and production, creating steady demand for marine support vessels. The development of large vessels with higher fuel-efficiencies, along with improvements in drilling efficiencies and effectiveness, will also boost the marine support service market. “Collaboration among nations as well as an effective government framework and support are crucial to the overall success of the O&G exploration and production sector in the ASEAN region. As far as the rig building activities are concerned, Singapore builders have established themselves as providers of high-end rig types and are more reliable than low-cost Chinese builders who dominate the global market,” concluded Wicaksana.
24 Philippine Resources
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Economic Commentary
Issue 1 2015
www.philippine-resources.com
Tracing the Success Story that is the Philippine Economy By Maria Paula Tolentino
24 March 2015 (Rigodon Ballroom, The Peninsula Manila, Makati City)
O
ver 600 delegates attended this year’s 4th Euromoney Philippines Investment Forum that reflected the continued optimism international investors have for the Philippines. In attendance was H.E. Benigno S. Aquino III, President of the Republic of the Philippines, as well as the participation of the Hon. Cesar V. Purisima, Secretary of Finance, and the Hon. Amando M. Tetangco Jr., Governor of the Bangko Sentral ng Pilipinas. According to the President, 2014 was a banner year for net FDIs. FDIs reached an all-time high of $6.2 billion, 65.9 percent higher than what the Philippines received in 2013.
There was also impressive growth from 2010 to 2013 wherein the Philippines averaged a GDP growth of 6.3 percent. And despite the lingering effects of Typhoon Haiyan and the uncertainty in the global economy, the Philippines still posted a respectable 6.1-per cent GDP growth figure in 2014. The Philippines has also received an investment upgrade from three major credit ratings agenciesc in 2013, and has continued to soar ever since. To add, Bloomberg reported that the Philippines is forecasted to be the world’s second fastest growing economy in 2015.
jects are now regularly completed ahead of time and under budget. Part of the wonderful news is that the DPWH’s budget has more than tripled: from P165 billion in 2010, to almost P570 billion in 2015. This is expected to grow even more as the administration’s goal is to have infrastructure spending comprise 5% of GDP by 2016. The administration has also been accelerating infrastructure development in the Philippines, namely, the public-private partnerships program [PPP].
The President states that the administration remains hard at work to maximize every opportunity available to the Filipino and quips: “You ain’t seen nothing yet.”
Since taking office, the current administration has awarded 9 projects, 16 in the process of being bid out while more than 30 other projects are under various stages of development.
INDUSTRY HIGHLIGHTS:
2. POWER AND ENERGY
1. INFRASTRUCTURE/PPP
Right now, the Philippines has a total dependable capacity of 15,665 MW, which should be sufficient to meet the country’s highest projected demand level of 10,222 MW for 2015. But the country still has to prepare for the power supply gap in Luzon due to the threat of El Niño and the rehabilitation of the Malampaya gas field.
Through the efforts of the Department of Public Works and Highways, corruption has been vastly minimized, and pro-
The Government has been actively pursuing an entire menu of options to address this projected shortfall. Currently, the administration is expediting the rehabilitation of the 300 MW Malaya Thermal Power Plant Unit 1 to help augment the power supply shortage in Luzon. It has been reported that they have also requested the National Grid Corporation of the Philippines to optimize the dispatch of hydropower plants, which will generate additional energy supply during peak hours. President Benigno S. Aquino III was the special guest at the 4th Euromoney Philippines Investment Forum.
26 Philippine Resources
Continued on page 28 >
Economic Commentary
Issue 2 2015
www.philippine-resources.com
Fourth Arangkada Forum looks at Asia’s Rising Tiger Fourth Arangkada Anniversary Forum 2015 March 3, 2015 Rizal Ballroom – Makati Shangri-la:
“
Together with our government, and with the hardworking Filipinos whose innate abilities are increasingly being recognised, you can help usher in an era characterised by meaningful progress, prosperity, and inclusivity, where each person can claim authorship of his destiny.”
That’s an excerpt from the speech of President Benigno Simeon Cojuangco Aquino III, in the recent 2015 Arangkada forum as delivered by Cabinet Secretary Rene Almendras. With an optimistic and forward-looking President, the Philippine economy has indeed been making competent strides.
< Continued from page 26 The President adds that the partnerships the administration spearheaded with the private sector has also proved useful in this crisis. Under the Interruptible Load Program, as of January 2015, 252 participants have signed up to use their own generators and de-load a total of 688.67 megawatts during times when power supply is too tight. Also, there are currently 48 committed incoming power projects with 4,693.6 megawatts of power expected to come online between now and 2018. Out of these 48 power plants, 21 will focus on renewable energy, which is in line with the government’s goal of diversifying the energy mix and building a power supply that is clean and reasonably priced. 28 Philippine Resources
According to a Bloomberg report, the country is forecasted to be the world’s second fastest growing economy in 2015, further adding that the Philippines has long dismissed its former moniker of being the “Sick Man of Asia” to what it is now referred to as “Asia’s Rising Tiger.” Since taking office, the President adds that the Philippine economy has climbed several global rankings of competitiveness at a blistering pace: from 85th to 52nd in the World Economic Forum’s Global Competitiveness Report, 144th to 95th in the World Bank’s Ease of Doing Business Report, and from 109th to 89th in the Heritage Foundation’s Index of Economic Freedom, among many others. He also acknowledges the fact that the budget for infrastructure has more than tripled, going from 175.4 billion pesos or around 1.8 per cent of GDP in 2011, to 570 billion pesos in 2015, which repre-
Also, in light of the realization of the ASEAN Economic Community [AEC], the Philippines is taking every possible measure to take on a more dynamic economic role in the region. The administration reported that the compliance rate in the AEC scorecard is now close to 86%.The President has already signed crucial laws that will help the country meet its financial integration commitments, which includes an Act Strengthening the Insurance Industry and the Act Allowing the Full Entry of Foreign Banks in the Philippines.
sents four per cent of GDP. To put in proper perspective this level of optimism, there are currently 20 sectors and/or subsectors that are rated to be moving players in the economy, they are: growth, competitiveness, agribusiness, business process outsourcing, creative industries, tourism, infrastructure policy, airports, roads and rail, water, environment and natural disasters, governance, judicial, labor, local government, macroeconomic policy, security, education, health and population, poverty. However, during a separate press briefing, Joint Foreign Chambers (JFC), the largest coalition of foreign investors composed of the American, Australian-New Zealand, Canadian, European, Japanese and Korean Chambers in the Philippines as well as members of the Philippine Association of the Multinational Companies Continued on opposite page >
role in the country’s growth story. The President states that the government has been working overtime to provide MSMEs the means to compete and succeed in an increasingly global market. As example, the country’s SME Roving Academy has conducted more than 1,871 training sessions focused on skills training, product pricing and costing, business planning, entrepreneurship development, and financial management, among many others. To date, these have helped more than 85,000 potential and established entrepreneurs.
3. EMPOWERING MSMEs An empowered micro, small, and medium enterprises [MSMEs] sector is one of the main foundations of a healthy economy. Ultimately, it can become one of the strongest and most direct tools towards inclusive growth, thus taking a leading
2015 is indeed an important year for the Philippines. Looking ahead, investors and business leaders will be keen to know if the nation can deepen its reforms and continue its impressive growth trajectory in the face of global economic uncertainty.
Issue 2 2015
www.philippine-resources.com
< Continued from opposite page Regional/Operating Headquarters Inc., emphasized that a long term strategy and continuity of reforms are necessary to set the direction towards achieving inclusive growth. “There are still key binding constraints that deter the country’s track to achieving inclusive growth,” they said. Currently, there are 9 sectors and/or subsectors that were rated as less active/ moving, these are: logistics, manufacturing, mining, power, seaports, telecommunications, business costs, foreign equity and professionals, and legislation. During this year’s Arangkada Assessment, JFC highlighted the following critical areas where reforms are necessary to achieve inclusive growth: 1) Creating a sound investment climate through regulatory and policy coherence
[From left] ANZCham President Ian Porter, CanCham President Julian Payne, ECCP President Michael Raeuber, PAMURI President Shameem Qurashi, 2015 Arangkada Philippines Lifetime Achievement Awardee Mr. Washington Sycip, 2014 Arangkada Philippines Lifetime Achievement Awardee and PEZA DG Lilia de Lima, KCCP President Edward Chang, JCCIPI President Yoshio Amano, and AmCham ED Ebb Hinchliffe.
Continued on page 32 >
Philippine Resources 29
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Economic Commentary
Issue 2 2015
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ANZCHAM President Grealy steps up, sees upside of doing biz in PH By: Maria Paula Tolentino
T
he Philippines has created a truly world class model for doing business in the BPO sector. It has been growing at 15%20% per year for around a decade. The lessons here are transferable. I often wonder how the Philippines can apply the same model to the mining and resources industry? Australia and New Zealand have gone through this process where we had to free up, remove restrictions, barriers and impediments and allow foreign investment in...and it worked!
< Continued from page 29
2) Enabling the middle class through equitable participation and larger share in economic activities 3) Promoting trade and investment liberalization and creating a level playing field for investors 4) Providing opportunities for gainful employment especially to the young labour force
− ANZCHAM President Tom Grealy on the potential of the Philippines With a BPO background, Tom Grealy assumes post in one of the countries most promising business organizations catered to the Australian and New Zealand business community. However, how can a man of his caliber contribute to such a fickle industry as that of mining and resource development? With only a few months to get things settled, Tom is determined to ensure that ANZCHAM continues to build its role as a leading advocate for Australian & New Zealand investors and businesses in the Philippines.
AN integration and other forthcoming FTAs such as the Trans Pacific Partnership (TPP). “The integration of the ASEAN economies by the end of 2015 will jump start the creation of a 600 million base consumer economy where long term prospects for investments, employment and equitable development are prioritized.
5) Supporting integrity, transparency, judicial reforms, anti corruption and peace initiatives
With the Philippines’ growth trajectory complements its desire to be a key and major player in ASEAN integration, it needs to enable a competitive environment for industries to thrive, participate in global value chains, and create quality jobs.”
To boot, the JFC also urged both public and private sectors to work together in charting a long term road map that will enable the Philippines to move up the global business and competitiveness ladders especially with the advent of ASE-
Undeterred, steadfast in mission and expectant of the future, the President looks at the young and growing labor work force that will eventually drive economic breakthoughs to the country in the next few decades.
32 Philippine Resources
In this sit down with the Journal, Tom opens up about how learning from industries such as the BPO can help the resources sector develop and thrive. PRJ: Tell us more about this ANZCHAM post TG: I’m excited about the prospects for the Philippines. I’ve been living here for almost six years now. I came here to establish Telstra’s country office. Within that span of time, I’ve seen the incredible opportunities the Philippines can offer to Australian & NZ businesses. The Philippines is a fabulous place to work, live and raise a family. This is my fourth term on the Board and Continued on page 34 >
He mentions the country will enter a “demographic sweet spot” where majority of the Philippine population is expected to reach working age that lasts for 35 years. He adds that countries who experience this can grow by at least 7.3 per cent over the next ten years. With the theme Invest NOW for inclusive growth, this year’s forum participants (and the world over) should indeed invest on the substantial human resource the Philippines is expected to pick up in the years to come. If the youth are indeed the future as what the President sees it to be, more attention should be spent (by this administration and the next) in preparing an educational curriculum that is globally competitive, hence equipping this young labor force the right skill set to help propel the country to economic progress. [Questions and/or clarifications about this story can be sourced through the Journalist at paulatolentino@gmail.com]
Economic Commentary
< Continued from page 32 I was delighted to be elected President for the coming year. I’m quite passionate about ANZCHAM because I see so much upside for companies doing trade and business with the Philippines. The Philippines is on the move – a bright spot in the global economy – and our ANZCHAM members have the experience and capabilities that the Philippines needs. PRJ: What are the key responsibilities of this post? TG: ANZCHAM is a member based, not for profit organization. So the key functions and responsibilities of the President are to ensure that the Chamber is managed well while keeping all activities aligned according to its charter. This includes promoting opportunities for our members to network and grow their businesses, as well as policy advocacy in support of an open trade and investment regime in the Philippines. PRJ: Aside from mining, what other industries is the Chamber looking for growth?
34 Philippine Resources
TG: We’re going to focus on making it easier for companies to do business here. The Chamber has a number of focus areas. One is BPO contact centers, which hold so much possibility in terms of employment and business -- there are a lot of Australian businesses moving work to the Philippines. The Chamber’s member networks have a lot of “know-how” that new entrants can leverage. Australia & New Zealand are also massive exporters of food, agricultural products and wine and, because of that, we will be setting up a new committee for this sector. We’ll also be establishing a committee on women in business, which is very important to me. There’s so much talent. Our charter is to be inclusive, so we really want to be a very high profile Chamber supporting women in business in the Philippines. We’re expanding the focus of our education committee to Education, Training and Labor. It’s part of a value chain. You come here, and you may be educated but
Issue 2 2015
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that doesn’t mean that you’re trained.You may want to be job ready. This reflects feedback from our members to support the development of the capabilities here in the Philippines. We have an infrastructure committee which is also very important. With the Philippine Government beginning to ramp-up infrastructure investment, there are members in the Chamber that are willing and able to help develop the Philippines. ANZCHAM has a fabulous track record of advocacy work focused on promoting the conditions of companies to be successful in the Philippines. In order to do that, at the simplest levels, is to provide network opportunities. But we also want to look at the opportunity to simplify investment protocols and business registration in the Philippines. Hong Kong for example, you can register a business in two weeks. Business registration here takes months. So you have all these companies with all of these paContinued on page 36 >
Economic Commentary
< Continued from page 34 perwork... in this day and age, why do we need that? That is the opportunity we are looking at, though not to criticize, but to promote a conversation where continuous improvement is the objective. The Philippines is moving up in the international rankings as a place to do business. But what’s missing in the conversation is ‘We want to be top 20 in the world’ as a place to do business. We have a committee that focuses on these issues and we’ll supplement that this year with forums for small and medium sized businesses.
PRJ: Quezon City is becoming a business hub now. There are Australian companies setting up shop there. Is ANZCHAM pursuing them? Should A-NZ businesses register with you first before setting up shop? TG: We’re ANZCHAM-Philippines, so yes we do cover them. But ANZCHAM is a voluntary organisation, so there’s no requirement for A-NZ companies to register upfront with ANZCHAM. However, we’d love to have them all join the Chamber.
But what I’d like to see is something more specific such as “we’re going to be up there alongside Hong Kong and Singapore as a place to do business.” That to me is exciting and it would help government officials continuously improve the regulatory environment simply by asking, “do we really need this much leg work for foreign companies to invest in our country?”
36 Philippine Resources
membership meeting on tax reform in the Philippines. It was an opportunity for our members to understand the Philippines better, give feedback and ask questions. The Congressman left feeling encouraged in the reforms that he is pursuing but also having learned a thing or two while talking to representatives from Australia and New Zealand companies that are doing business with the Philippines. I think we’re going to achieve a lot this year, while growing our membership as well. Currently, we’ve got around 300 members. But just this February, we signed 6 new members. We are, without a question, the peak business organization for Australian & New Zealand companies doing business in the Philippines.
PRJ: So there is no ambition? TG: Well there is lots of ambition, it is just not articulated as sharply as it might be in this space. There is no question that the Philippine government and policy makers have ambition for the country. I admire what it has achieved – economic growth of 6%-7%.
Issue 2 2015
www.philippine-resources.com
PRJ: Is the Chamber focusing efforts on Mining and the energy business?
PRJ: Do you think the Chamber will be able to achieve significant developments given your 12 month post? TG: Yes. Aside from the priority items we discussed earlier, with the help of a grant from Austrade, we’re undertaking a study on ASEAN integration on Philippine-Australian business. We are also directly engaging senior Filipino policy makers. As an example, Congressman Miro Quimbo (Head of the House Ways and Means Committee) gave an outstanding talk at our February
TG: Absolutely. ANZCHAM plays a lead role in the JFC (Joint Foreign Chambers) on mining and resources. The lead times in mining and resources is enormous. We are very energetic, whether it be under this Administration or the next, our goal is to advocate on behalf of Australia-New Zealand mining and the resources community to create the conditions where they can be successful. It is absolutely in the interests of the Philippines to create the conditions to allow international mining companies to invest. You cannot live in the Philippines Continued on page 36 >
2nd Annual
3-4 JUNE 2015 SMX Convention Center Manila, Philippines
Leading speakers Pedro Maniego Jr
Deon James
Tetchi Capellan
CEO, Dagupan Electric Corporation
President, SunAsia Energy & Founder, Philippine Solar Power Alliance
Ather Sajid
Melinda Ocampo
Jose Raul Saniel
Non-Executive Chairman, EOil & Gas & Former Special Adviser, ODA – Privatization Affairs, Department of Energy
President, Philippine Electricity Market Corporation
President, Philippine Rural Electric Cooperatives Association
Gavin Barfield
Manuel Aquino
Frank Thiel
Chief Technology Advisor, Meralco
Service Director, Economic Policy Research Service
Managing Director, Quezon Power, Philippines
Chairman, National Renewable Energy Board
… and more. Visit the website for the full speakers list.
Featuring:
Created by:
www.terrapinn.com/philippinespower
Economic Commentary
< Continued from page 36 and not care that so many people live in poverty. I was just looking at Oceana Gold recently, they’ve created hundreds of jobs in a part of the country where few others invest. In the BPO services sector the Philippines has created a world class model that has enabled significant, sustained foreign investment. This sector has been going at 15%-20% for a decade and has created over 1 million jobs for Filipinos. I often wonder: How could the Philippines apply the same model to mining and resources? Again, I’m not criticizing. My goal is: let’s look at the opportunities, the lessons here are transferable; the Philippines has created a world class model to stimulate foreign investment. How can this be applied in other sectors? PRJ: How is it possible that you can spearhead projects for mining? TG: It’s the fresh energy and fresh set of eyes. I’ve got a lot of confidence in what the Philippines and Filipinos can achieve. We need to continue the conversation about growing the Philippines across every sector, and not be gloomy about the prospects. I’m not gloomy at all, in fact, I am energized. PRJ: Your predecessor came from the mining industry, so it’s a very different dynamic. TG: I understand. But you have to be in the game. Its not like the BPO sector doesn’t have its challenges. Everyone’s trying to provide outstanding customer service back to their home markets; yet BPOs average around 70% attrition, making it challenging to deliver excellent service consistently. So every industry has its challenges, and its just about keeping an eye on the prize and looking further ahead. I think the Chamber and the JFC have a very powerful agenda and voice, and we’re going to continue articulating all the reasons why foreign mining should be encouraged and supported. 38 Philippine Resources
It’s a very interesting situation that the Philippines finds itself in. If it weren’t for typhoon Yolanda, the country would have grown around 7% last year - which is globally outstanding given the current international conditions. However, if the Philippines could grow at 12% - 14% and sustain that for several years, we’d wipe out poverty in one generation. This is why I pose the question: where’s the ambition to be in the top 20 as the place to do business? There’s the potential to remove poverty in one generation. And if you’re serious about that, then restrictions and impediments on foreign investments need to be significantly reformed. Every country, including Australia and New Zealand, have gone through this process of structural reform where we had to free up, remove restrictions, barriers and impediments and allow foreign investment in...and it worked! PRJ: How can we learn from the BPO industry? TG: The lesson is clear. Create certainty for foreign investors, simplify business regulations (making it easier to do business) and the investment will flow into the mining and resources sector. And, the Philippines can develop a more rounded economy and create thousands of jobs for deserving Filipinos. In the BPO sector, Government and industry work together constructively. The government said “We want this foreign investment, we want the jobs.” There are strict rules on how you can qualify such as PEZA registration, but the rules are transparent and they don’t change. And so companies can operate and be given certainty. In the mining sector, there is a lack of certainty. So its not saying, copy exactly what’s going on in the BPO industry rather the principles. So how do you create a successful mining industry in the Philippines? It can be done. PRJ: An administration that isn’t for mining.Your thoughts?
Issue 2 2015
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TG: I hear that a lot. I don’t think that it is a starting point or an end point because as I’ve said, what’s required is to create conditions for companies to be successful in the Philippines or anywhere else, it never ends. I don’t think that focusing on a particular Administration is the right approach. The right approach is to support the development of a policy framework that provides certainty, transparency and is smart. In the Philippines, that means the government gets the revenues that it should. It’s smart because it enables foreign and mining companies to invest. It’s smart because it ensures that companies operate according to the law – including caring for the environment. The number one thing our members need is certainty and clarity. I’ve heard that the mining law of the Philippines, at an international level, is very good. But the application of the law, it appears, doesn’t give the certainty that is required. PRJ: Personal milestones in achieving these conditions? TG: That goal of promoting conditions for companies to do business here doesn’t have a finish line. You’re never there. The economy goes up and down, the international bar changes. So, my goal is to strengthen the capability of the Chamber to play a leadership role in promoting the conditions for business and investment on a sustainable basis. Together with the ANZCHAM team, we want to strengthen the financial management and oversight of the Chamber, strengthen the IT capability and human capital, the development of people and probably recruit one or two more people as well. Build the capability in the Chamber so that we continue our leading role in the Australian-New Zealand business community. That we have a growing membership, fabulous networking opportunities for our members and that we’re highly regarded in the Philippines.
Mining Briefs
Mining Briefs Changing of the guard at Atlas Mining; Ramos steps down, son takes over Atlas Consolidated Mining and Development Corp. announced the retirement of Alfredo C. Ramos as president of both the company and its fully owned unit, Carmen Copper Corp. Adrian Paulino, Alfredo’s son and Atlas Mining executive vice president, took over starting April 1. The father will remain chair of Carmen Copper, reported Ronnel W. Domingo of the Philippine Daily Inquirer. “Alfredo Ramos played a leading role in reviving a pillar of the Philippine mining industry,” the company said in a statement.
Issue 2 2015
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ca-Cola Export Corp. and Asian Alliance Investment Corp. Atlas Mining recently reported a 79-percent contraction in 2014 income to P397 million. This was much faster than the 45-percent drop recorded in 2013 when net income was pegged at P1.9 billion. In 2014, revenues jumped 12 percent to reach P16.2 billion, buoyed by higher output and shipment volumes. However, lower realized metal prices as well as higher costs, higher depreciation from new assets, financing and income tax charges tempered the effects of brisk production. These factors came on the heels of the expiration in October 2013 of the income tax perks of subsidiary Carmen Copper. ///
“The entire Atlas Mining organization is grateful for his stewardship of the company, and expresses its full support for its new executive officers.” Adrian is concurrently director of Anglo Philippine Holdings Corp., The Philodrill Corp., United Paragon Mining Corp., Zenith Holdings Corp., and Berong Nickel Corp. In a board meeting held March 23, the directors of Atlas Mining also named Enrico C. Nera and Tristan B. Choa as executive vice presidents. Nera, who will also take office as chief operating officer, will be in charge of operations. A licensed metallurgical engineer, Nera used to be with the consultancy Minercon International, gold producer Philex Mining and international service provider Cytec Industries. Choa will be responsible for general support services. An industrial engineer, Choa used to work for Prudential Company Asia, Co40 Philippine Resources
Nickel Asia to acquire Isabela mining project Nickel Asia Corp., the country’s top nickel producer, said it will acquire a mine project in Isabela. In a disclosure to the Philippine Stock Exchange, Nickel Asia said it is buying a controlling stake in Geogen Corp., which owns the mineral rights over the property in Dinapigue, Isabela, for up to P720 million. NiHAO Mineral Resources is the current operator and general contractor of the Isabela project, where it mines nickel saprolite and limonite ores for direct shipment and export from the Philippines. Under the deal, NiHAO will turnover operations of the Isabela project to Nickel Asia. NiHAO will still get a 20 percent share in net profits. At the same time, Nickel Asia will acquire a 10 percent stake in NiHAO from a group of its existing and controlling shareholders at P4 per share.
NiHAO will also grant Nickel Asia exclusive preference and priority to explore, operate and develop its other mining properties in Zambales, Misamis Oriental and Masbate. “If Nickel Asia proceeds to explore, operate and develop the aforementioned properties, NiHAO and/or its subsidiary, as applicable, will be likewise granted the same terms as that of the Isabela project,” the company said. In a separate report, NAC announced that it will be investing up to $24.5 million (P1.09 billion) in Philippine-listed company NiHao Mineral Resources International Inc (NiHao), buying 10 per cent of the company and 100 per cent of its mining project. NAC informed the stock exchange that it has signed letters of intent to purchase at least 10 per cent of NiHao at P4.00 per share worth P365 million, and up to 100 per cent of Geogen Corp worth P720 million. Geogen is the claim-owner of the Isabela Nickel Project, which is one of several local mining claims of NiHao. Martin Antonio Zamora, NAC’s SVP for marketing and strategic planning, said the investments will give NAC flexibility to adapt to the challenges and opportunities that lie ahead in the mining industry. “While the nickel market is presently at a crossroads, there is no question that future prospects are bright, given that global demand for nickel and other minerals will continue to grow,” Zamora said. “In addition, our newly formed alliance with NIHAO will no doubt result in synergies and open doors to more opportunities.” NAC is the Philippines’ largest producer of nickel ore and operates four nickel mines, from which it shipped and delivered 17.8 million wet metric tonnes in 2014. It also has a minority interest in two processing facilities, namely the Taganito and Coral Bay HPAL plants. Continued on page 42 >
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CONTACT Greg Brimble at greg@energy-pubs.com.au to find out more about the opportunities PNG Resources can offer your company or TEL: +61 (0) 8 9443 3400 I PNG MOBILE: +675 7681 0995 Printed each quarter for the past 23 years.
Mining Briefs
< Continued from page 40 NAC fully intends to carry over its brand of responsible mining in this first foray into the Northern Luzon region. According to NAC, NiHao will grant them the sole and exclusive preference and priority to explore, operate, and develop its mining claims and subsidiaries, such as the Mina Tierra Gracia Inc in Botolan and Iba, Zambales province, the Bountiful Geomines Inc in Opol and Manticao, Misamis Oriental, and the Masbate 13 Philippines Inc in Milagros and Mandaon, Masbate. “If NAC proceeds to explore, operate, and develop the aforementioned properties, NIHAO and/or its subsidiary, as applicable, will likewise be granted the same terms as that of the Isabela Nickel Project,” NAC said in its statement. According to a recent mineral resource estimate report shared by NAC, resource base of the Isabela Nickel Project stood at about 89.89 million dry metric tonnes at 1.2 per cent nickel as on April 2013. Acquiring Geogen would result in a 24 per cent increase in NAC’s nickel resource base in terms of DMT, which stood at 287 million DMT at 1.27 per cent nickel as at December 2013. /// TVI Pacific puts off planned listing at PH stock market The Canadian operator of a nickel mine in Agusan del Norte, a province in the southern Philippine island of Mindanao, is deferring a plan to list at the local stock market. “There’s no panic. We want to list at some point, but there’s a number of things that we want to see before we list,” TVI Pacific Inc. president Clifford James said on the sidelines of the Philippine Mining Luncheon. James said the company would rather wait out weak metal prices and the 42 Philippine Resources
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Philippine government’s unclear mining policy. The Aquino administration is pushing legislation that would increase the government’s share in mining revenue, a proposal that big mining companies are opposed to. Another issue is the Philippine government’s plan to ban export of unprocessed ore, which would discourage mining firms from building processing plants.
government and our industry will come to a mutually-agreeable framework to ensure sustained economic growth in the future while ensuring the protection of people and the environment,” he added. /// “Minahang Bayan” applications soar in Cordillera
BAGUIO CITY – The Mines and Geo-sciences Bureau (MGB) of the Department The Canadian company earlier an- of Environment and Natural Resources nounced that it was gunning for an initial (DENR) received 49 small mining appublic offering of its Philippine unit, TVI plications since Executive Order NumResource Development Philippines Inc. bered 79 was issued in 2012. (TVIRD), in the fourth quarter of this year. Section 11 of EO 79 limits the activities of small-scale mining, which is aimed to “Again, we’re not committed to any par- contain mine tailings from spilling into ticular timeframe. We don’t need the the environment in general. money but it would be nice to have the money to hasten growth,” James said. In an interview, MGB Regional Director Fay Apil said there were 20 applications “Right now, I will not be advising to the from Benguet, 10 from Apayao, six from board for IPO. We will list when it makes Baguio City, four from Mountain Provsense to us,” he added. ince and three each from Kalinga, Abra and Ifugao provinces for a total of 49 apProceeds of the IPO would be used to plications. replenish working capital and to build a processing plant. Apil said this only signified the intent of the people and small-scale mining assoTVIRD, through Agata Mining Ventures ciations in sustaining their means of liveInc. (AMVI), mines nickel at its Agata pro- lihood. ject in Agusan del Norte. TVIRD owns 60 percent of AMVI, with Mindoro Re- The DENR and the City and Provincial sources Ltd holding the balance. Mining Regulatory Board are scheduled to discuss the Implementing Rules and TVIRD also is securing permits for the Regulations prior to the identification Balabag gold-silver project in Zamboanga of “Minahang Bayan” and approval of the del Sur. applications. The company was the first foreign entity to receive the license to operate under the Philippine Mining Law of 1995.
”Minahang Bayan” is an attempt of the government to regulate small-scale mining which are blamed for poisoning of waterways and deforestation which “TVIRD supports the government’s vi- eventually leads to soil erosion and landsion for an industrialized Philippines. slides or flooding. In fact, it is inherent for every mining company to support this development The EO bans the use of mercury and cyas metals, machinery and the extractive anide in small-scale mining and provides industries play a focal role in industriali- for the state ownership of mine tailings zation,” James said. and wastes upon the expiration of the contract. - Philippine News Agency. “We have confidence that the Philippine
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Energy News
Issue 2 2015
www.philippine-resources.com
Natural Gas Summit: Finding new Malampaya ‘must be nat’l priority’
T
he International Energy Agency (IEA) has urged South East Asian countries, including the Philippines, to increase the share of natural gas as power supply with the projected surge of electricity demand in the ASEAN region. Meanwhile, experts underscored the Philippines’ need to discover another Malampaya gas field by saying it “must be a national priority” with the depletion of natural gas from the deep water gas-topower project looming in 2024. Misako Takahasi, Asia Pacific and Latin America division head of the IEA’s global energy policy office, expressed these views during her keynote speech at the Natural Gas Summit 2015 at the Intercontinental Hotel in Makati City. She said the demand for power in Southeast Asia is expected to surge by 80 per cent in 2035. “The engine of demand growth moves to Asia. ASEAN energy demand increases by over four-fifth in the period of 2035, or by more than the current energy consumption of Japan,” Takahasi said.
But she also noted that the rising electricity demand is still “normal” given the projected growth of the Southeast Asia supported by the ASEAN Economic Community (AEC) taking place by end2015.
urged the government to streamline the procedures for drilling for new gas fields. The drag turns off exploration companies and discourages them from pouring in billions in investments into the Philippines, the Shell country chief said.
The region’s population growth and the number of people without access to power will also drive the increase in demand in the coming years, Takahasi said. “This rate is not surprising given the large population and economic growth of South East Asia.”
“We are really appealing to the government to put in mechanisms to be able to drill. For those who don’t know, in other countries, they drill 60 to 100 wells a year.The Philippines, last year, drilled only two wells. We need the government to be able to work out a way for that to happen,” Quinones said.
A decade in the making Also at the Natural Gas Summit, Sebastian Quinones, managing director of Shell Philippines B.V. and president of the Petroleum Association of the Philippines (PAP), asked what is next after Malampaya. “The reservoir will be depleted. It takes a decade to get those things to happen. Shouldn’t we start exploring now? Shouldn’t we start to have appraisal (of areas) now? Unfortunately, that is not yet going to happen. There is difficulty in getting exploration blocks,” Quinones said. The PAP, which counts 30 members,
Rufino “Boomie” Bomasang, a director of Otto Energy and part of the group that brought Malampaya online in 2001, echoed Quinones’ sentiments. “Given that Malampaya is projected to be depleted in the next decade, looking for the next Malampaya should be a national priority. I’ve always believed that there must be another Malampaya somewhere out there in offshore Palawan. Is there another one? Only exploration can tell us,” Bomasang said. The gas from Malampaya fuels three natural gas-fired power stations with a total generating capacity of 2,700 megawatts, accounting for roughly 45 percent of Luzon’s power generation requirements. These power plants are the 1,000 MW Sta. Rita and 500-MW San Lorenzo plants, owned by the Lopez Group, and the 1,200 MW Ilijan plant owned by Kepco Philippines. For more drilling to happen, Quinones said in a separate interview with The Philippine Star: “We need to talk to a lot of government agencies. For example, we need to bring in expensive equipment. We need fiscal incentives, so we really hope the government can streamline procedures.” Continued on following page >
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< Continued from opposite page Preparing ASEAN for power demand Malampaya is a public-private joint undertaking spearheaded by the Department of Energy and developed and operated by Shell Philippines Exploration B.V. (Spex), which holds a 45 percent stake. Joint venture partner Chevron Malampaya LLC also holds 45 percent, and the PNOC Exploration Corp. has the remaining 10 percent stake. Under the service contract agreement, 70 percent of the gross proceeds from the sale of natural gas from Malampaya would go to the contractor to recover the investment cost. The remaining 30 percent is shared by the government and the private consortium on a 60-40 basis. In the region, only Singapore and Brunei
Darussalam have 100 per cent of its population having access to electricity, according to a study of Philippine Institute for Development Studies (PIDS). In the Philippines, 16 million people have no access to electricity. In comparison, PIDS noted Indonesia has 63 million with no access to power, followed by Myanmar (26 million) Cambodia (10 million), Thailand (8 million), Laos (2.2 million), Vietnam (2 million); and Malaysia with 200,000. “The challenge for the region is whether it’s prepared or not for this demand,” Takahashi said. She argued that power supply in the region must evolve from coal to natural gas “as coal-fired power plants have contributed a lot to climate change which will cause detriments to economic prospects.”
The IEA projected that coal will remain the main source of power in South East Asia in the coming years, followed by renewables, gas, and nuclear energy. But Takahasi noted that the volume of liquefied natural gas produced by the region will double by 2035. Takahashi also said the IEA supports the Trans ASEAN Gas Pipeline (TAGP) Project, which is envisioned to establish interconnecting arrangements of electricity and natural gas among the ten member-states of ASEAN to ensure greater security and sustainability of energy supply in the region. According to the ASEAN Council on Petroleum (ASCOPE), the TAGP Project, led by Malaysia’s Petronas, has already established 11 bilateral connections with a total of 3,020 kilometers of pipeline connections, making possible the transmission of gas among ASCOPE member countries.
Philippine Resources 45
Working with the community
Issue 2 2015
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Alpha Galaxy opening eyes in far-flung parts of the country
M
ining communities are usually located in farflung places where not all public health facilities are available. While mining companies in the Philippines are mandated by law to provide amenities for the well-being of their workers and the surrounding populace, health services such as regular eye checkups are usually done in the main urban and rural centers -hours or even days away from the mine site.
Alpha Galaxy Optical (AGO), however, is out to change that. Although based in Makati City, the business is bringing its free eye testing service wherever its clients are – whether on site at a mine or other work places, or even at schools and community halls in the faraway barrios of mineral-rich areas. “Eyesight is important to workplace productivity and safety, student success and general personal well-being and confidence,” says Frank Goldfinch, Manager of AGO. “Our free eye testing service is perfect for the mining industry, and with
all other industries regulated by the government to provide social responsibility and community programs.” With studies indicating about 90 percent of daily human activities needing the use of vision, optimum eyesight ties directly to employee productivity – workers with better vision certainly will be safer and more efficient, Goldfinch says. “Employee Eye Testing is vital to your company’s forward vision.” To that end, Alpha Galaxy brings stateof-the-art optical equipment and experienced optometrists to consult on its clients’ eye vision. It can perform on-site eye testing “even in remote and timesensitive locations,” adds Goldfinch. AGO offers “a potential industry-andcommunity partnership” through eye testing in underprivileged areas, he says. “We often pose this question to our partners: how productive are your employees? How long has it been since your employees were eye tested?” In many cases for mining companies, it’s been too long, Goldfinch adds. For instance, in a 2012 oculo-visual study of 400 workers at a gold mine in Ghana, about 45 percent were suffering from presbyopia, or difficulty to focus on nearby objects – and only a third of these people were wearing corrective glasses. About a quarter of the employees also had chronic conjunctivitis or “pink eye.” Left undiagnosed, these eye conditions (and more serious ones) at a hazardous location such as a mine can leave workers – or any kind of employee – in real danger, Goldfinch says. That’s why AGO’s mission is “to improve our patients’ work and social satisfaction levels and safety by supplying a professional eye care service at all times” even at secluded locations. Continued on following page >
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< Continued from opposite page Alpha Galaxy has a wide range of spectacles and contact lenses at competitive prices, and even children’s glasses at very low prices, he adds. Companies can arrange to have AGO’s free eye testing around a family day with workers and their kids present, or even as a team-building activity “with minimal disruption to the working day.” The firm says they can deliver glasses and lenses within one week regardless of location, and Alpha Galaxy takes pains to inform patients of new eye care developments and the latest techniques. “We provide an up-to-date world class service to our eye care patients from all walks of life,” Goldfinch says. Mining firms could do little wrong by using a portion of their Social Development and Management Program (SDMP) budgets on community eye care programs with AGO as a partner, adds Goldfinch. But the bottom line for Alpha Galaxy, he says, is to “treat all our eye care patients with care and compassion, respect the confidentiality of our patients, and provide excellent after sales service” – whether in Makati City or in mining’s hinterlands.
For inquiries, Alpha Galaxy Optical can be reached through phone number +63 920 205 6234, e-mail frank@ag-optical.com, or the website www.ag-optical.com.
AGO is located at Shop FB35A, First Basement, Makati Cinema Square Mall, Chino Roces Avenue, Makati City.
O Shallow Land O O Utilising
Shallow Marine O Transition Zone O Oil gas O CBM O Mining and Heavy Construction Environmentally friendly Wireless Equipment
Geophysical Services Singapore (Pte) Ltd 8B@ Admiralty 8B Admiralty Street #04-06 Singapore 757440 Tel: +65-6494 0600 Email: cf@gsl.com.sg Philippine Resources 47
Technical News
Issue 2 2015
www.philippine-resources.com
Land geophysical acquisition in SEA needs special skills in Asia
L
straightforward sources, in relatively simple geometries, with limited variety in terms of spatial sampling, offset and azimuth.
These are not only some of the toughest and most varied environments in the world but there is also nowadays a growing need to be able to record both active and passive data.
The notions of some form of less traditional data acquisition, such as passive recording (with all the many varieties this can take), complex active acquisition geometries or using multiple recording and/or
and geophysical contractors planning to work in the South and South East Asia regions face special challenges.
Geophysical Services Ltd. (GSL), while being an established marine seismic operator, believed that by careful choice of equipment and operating procedures it could be successful onshore in this competitive area. This article reviews the issues Geophysical Services Ltd. considered in terms of cableless recording systems, which could maintain communication in jungles of quickly changing elevation, through villages and major cities, and across deepwater courses and shallow marine. Hardware considerations also covered the sources and source control which would bring extra versatility andeffectiveness to operating in these difficult locations. Introduction Less than a decade ago, the requirements placed upon most seismic contractors were quite unsophisticated, at least in comparison to those encountered today. Almost all work which the majority of companies could be asked to bid for entailed acquiring active data using fairly
Source systems were not at all common. There has of course always been a need to work in environmentally awkward locations such as areas of rapid elevation change, dense jungles and villages, and across difficult water courses but such challenges were more often than not met by an easing of acquisition parameters to allow work to progress. In many such circumstances, data quality was compromised. Today the range of operations which a contractor can be asked to engage in is enormous and there is no sign that this rate of increase is slowing at all. Thus, while it may be a very exciting time for exploration geophysics, this growing variety of work means that the smaller contractor must tread very carefully if it is to survive and prosper, including what equipment is chosen and how specifically it can be operated. Large geophysical contractors can have a wide variety of hardware on their shelves to take on a range of operations but such luxuries are not available to newer or smaller operators. The established seismic contractor can also, and apparently sometimes do, afford to make mistakes in equipment choice and operational techniques employed when they approach something new. If they get things wrong, perhaps coming back with poor or no data, or losing significant sums on any operation by mis-
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judging its complexities, they usually live to fight another day due to their financial backing. This is not the case with smaller companies. Birth of new type of geophysical land operator Geophysical Services Ltd,. was a company already with a good reputation for specialist marine acquisition in the Middle East and south-east Asian regions, and it now wanted to move onshore by offering comprehensive land geophysical services too. Geophysical Services Ltd., and Singapore based processing house Dolphin. It believed a full service operation could be provided, offering high quality, flexible and efficient land and TZ services. However, it knew it had to be wary of every possible pitfall, and be extremel discriminating in how it went about establishing itself on the land scene. It could not afford to make mistakes financially and was very conscious that only those who best understand the latest technology and techniques had any chance of successfully competing. Not even GSLâ&#x20AC;&#x2122;s most senior staff believed they could foresee every twist and turn that they may be faced in land and shallow water work. However, as they started to consider the type of hardware would be best suited to the challenges of Continued on opposite page >
Technical News
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< Continued from opposite page this part of the world, they recognised that the industry was already undergoing significant technological changes regarding recording systems, sources and source controllers and they would need equipment which could keep up. In terms of instrumentation, it needed technology able to work equally effectively in active and passive recording and in all the environments usually encountered in this geophysically difficult region. GSL rather quickly dismissed use of any seismic system which relied on digital telemetry cables. Cableless systems had been around for a few years and their advantage over cabled systems was already apparent. If GSL were planning to work in desert areas or some fairly flat geographical locations with few obstacles, then cabled systems may have been worthy of further consideration but this was not what was planned. Operating a crew with one thousand channels or one hundred thousand in desert locations seemed mostly to be only a matter of scaling up. Take a small cable system and keep adding to it, and as long as the environment is not too challenging and one does not exceed the data capacity of the cabling, then compared to the difficulties of work away from deserts, there was not much that could go wrong. It had been done many times before, over many decades and any reasonably experienced operator could make it work. However, GSL’s target environments were much tougher - typical terrains in
SE Asia are far from flat and never without obstacle and at times through towns and Cities, so some form of cableless kit was certainly necessary. Additionally, understanding the special needs placed on equipment when involved in exploring for unconventional resources or geology meant that telemetry cabled systems were totally excluded. Operating a crew of just a few thousand channels in, for example, jungles of Sumatra, or through major towns, busy villages, or across difficult water courses, had far greater numbers of possible pitfalls than flat desert operations, and in such awkward areas any contractor large or small, could get into trouble rather quickly. Having ruled out cabled telemetry systems, the choice now was in regard to so-called cableless recorders. There were already about half a dozen such products on the market for GSL to seriously consider, broadly falling into two groups: those which offered no method of communication between central system and remote units, and those which claimed that they could provide some means of communication under certain circumstances. Shoot blind or not Shoot blind The former group is, for good reason, known as “shoot blind” hardware because the observer literally may as well be completely without eye sight on the operation. Here, it would be impossible to remotely control ground units, which for Asian environments GSL believed essential, which will be described later. Worse still, the user has no efficient or simple way to know if equipment, including connected batteries and sensors, is working properly, whether it has been disrupted, destroyed or stolen. GSL had read material on such products explaining that the way around the issue of hardware security was to bury it on the basis that those likely to steal equipment would not be able to see it once buried. However, for the company’s expected
markets, burying equipment would be neither practical nor economic, or indeed, likely to be successful in thwarting the efforts of those determined to steal equipment. Most importantly of all, given the type of active and passive work GSL realised that it would be bidding for, it understood that the ability at least to be able to check line or array noise (in the case of passive data acquisition) would be essential, especially in City enviroments. Without being able to monitor either equipment security or data quality remotely, the company believed it could risk going out of business on its first operation, so GSL simply was not willing to take the chance. This proved to be a very wise move for two reasons: Firstly, reports were soon to become public that in a few areas of the world where shoot blind operations were common - primarily the Americas - some crews were coming back with rather poor data and, in some cases, very significant equipment losses. It was rumoured that at least one company may have gone out of business for choosing shoot blind technology. Secondly, it was to turn out that on GSL’s very first jungle operation, one of its active lines went through an area of undisclosed illegal mining which not only was a source of noise but very likely of theft. As it eventually turned out, thanks to the features of the hardware it had chosen, the operation was able to continue and work “around” mining noise, and no equipment was lost at all. GSL feel that Continued on following page > Philippine Resources 49
Technical News
< Continued from previous page bad data or theft would have been the result had it not been able to use the seismic system to monitor closely what was happening on this line. One extra advantage in deciding against shoot blind technology was that it reduced the number of recording instruments the company needed to choose from. On reviewing the remaining systems, even though they all had to use the only licence free radio band available (the 2.4 GHz ISM band) it seemed they each made use of the technology in different ways. The downside of having to use this frequency is that it is very readily absorbed by water molecules, whether in the atmosphere or in vegetation. This problem is clearly a significant one for those wanting to work in equatorial rain forest and monsoonal areas. Thus, what GSL had to judge was which 2.4 GHz radio technique would meet its minimum operational requirements across the range of locations it expected to find itself in, most of which had humid climates and/or thick jungle, and in some places even significant radio interference. The information available with all these systems spoke about a “real time” capability. However, on further investigation
Issue 2 2015
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GSL discovered that “real time” for any cableless system had to be qualified by a discussion of just how much data would be available, after what sort of delay, and under what circumstances. The definition of “real time” for cable systems is not necessarily the same as when the term is used for cableless equipment. Independent of the special problems of 2.4 GHz transmissions, the issue for all radio systems is the laws of physics. How these apply to seismic systems is that for the same amount of radio power, a system can transmit longer range with a small data rate, or a higher data rate with smaller range. The company had already read that it is more or less impossible using relatively easy to deploy equipment to send high bandwidth data, using legal low power 2.4 GHz-based transmission, through jungles over any reasonable range. So most importantly of all, GSL needed to know when the communication would fail and how the system would then behave - would it simply transmit less data, or would it revert to an autonomous shootblind mode? If the latter, would it then effectively stop working when communications with the central systems were not possible? It has astutely seen that most system manufactures avoid discussing such critical issues in their brochures! The Battery Problem Batteries were another issue GSL thought needed some detailed consideration. A cable system of a few thousand channels may only need fifty batteries in total but autonomous cableless recorders need one battery per ground unit. Therefore, a two thousand channel cableless system with only one digitising channel per box (“single channel per box”) needs at least the same number of batteries. And it turned out that some recorders even recommend the attachment of two batteries per box plus another large number to be on charge and waiting to be used. That could mean one hundred
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times as many batteries (cabled compared to cableless) in the extreme case. Significantly, “the battery issue” and its knock-on effects has been mentioned in various publications covering cabled versus cableless operations, including most recently a paper authored by the Italian oil company ENI and given at the SEG Convention in Las Vegas in 2012. (This paper also happened to mention that the cableless system used, which theoretically was capable of “real time Communication”, had apparently nevertheless not provided simple communication such as transmission of noise information during the test in terrain much simpler than that which GSL expected toc encounter.) GSL believed that the battery usage issue and lack of guaranteed communications were related problems and could be mitigated in at least two ways. The first was to avoid any system which only offered a single channel per box. Obviously, looking at recorders, which, for example, included three recording channels per ground unit not only gave GSL the possibility to bid for 3C work but would also at a stroke reduce the number of batteries required by a factor of between three and six. Next, being able to remotely switch on and off ground units at any time would limit power consumption, so again the issue of guaranteed two-way communications in all environments came to the fore. GSL happened to notice, perhaps it was a coincidence, that most systems which claimed they were not shoot blind. but would also not guarantee communications, recommended the same expensive battery technology used by the systems which were designed to be shoot blind, Continued on page 52 >
Technical News
< Continued from page 50 namely lithium based batteries. GSL’s technical personnel wondered why such high energy density batteries would be required if one were able to switch on and off remote units to save energy. GSL had a strong preference for not using this battery chemistry. Lithium offers more energy for unit of weight of battery (which may been essential if one cannot switch off the system remotely) than for example, sealed lead acid batteries, but is very considerably more expensive. Additionally, lithium based batteries generally had shorter lifetimes in terms of number of charging cycles, tended to be fussy about the temperature at which they could be charged, usually required special and expensive chargers, often had to be bought from a single source (not available locally) and counted as hazardous material when it came to shipping. As far as this part of the hardware was concerned, GSL saw significant advantage in being able to use locally supplied items, perhaps something like a motorcycle battery. Taking all these issues in to consideration, in the end the decision about which system to chose was easy to make as only one system guaranteed that the company could maintain communications in all operational environments and would not insist on use of lithium-based batteries. By doing so, it relieved in one fell swoop GSL’s fear about data quality, hardware theft, system power and being able to be sure that the company was acquiring data as per contractual requirements in terms of dead or noisy channels.
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The communication technology employed by the basic system chosen is known as mess radio networking (MRN). It has worked every where GSL has operated, which includes thick jungles, across salt and fresh water, through villages and cities where there may be significant obstruction and interference. Areas of rapid elevation change can be used to advantage as MRN relays can be positioned such as to make the communication links even more foolproof. It works so well because it is not trying to break any laws of physics applied to 2.4 GHz transmission. In other words, it does not try to send too much data too far. In fact, the MRN system inside each ground unit just sends data to its nearest neighbour seismic ground units and leaves them to pass it along the mesh so formed to the central system which can therefore be located anywhere on the mesh. The data ending up on the observer’s monitors comes from all deployed boxes includes everything one would expect to have available in a cable system with the exception of the seismic data file itself. If ground units tried to send something of this much higher bandwidth, then equipment would not be at all as easy to deploy and probably not work in jungle conditions due to range limitation and absorption. However, this still means that the MRN is able to test everything important to the health and security of the system and the data is is collecting, and return the test results more or less instantly to the observer. These tests include ground unit and battery condition, full sensor verification and GPS reception, box position and security information, noise and instrument tests, which is logged for retrieval in the recoding unit in the Dog house. If one has tested all aspects of the deployed hardware and everything is found to be working, then what issues are left untested are mostly just those related to
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the geophysical problems of the survey, and those may need changes in survey design to fix, so these are not really then hardware issues. When GSL wanted the full data set available, for example, so that the QC/birddog could see how the data looks, the Sigma system even provides a few methods of very quick data harvesting which do not rely on any 2.4 GHz connection. They instead allow simple copying from internal box memory to an external memory device, via either the ground unit’s built-in ruggedised USB or Ethernet connectivity. The company’s original fear for the data harvesting phase was that if 2.4 GHz was a problem for sending real time data any distance, then it could be a similar problem if the technology was used for data harvesting. With memory-copying based harvesting, this issue was also taken care of. Communications were possible throughout the survey even where terrain included thick jungle and obstacles. Whereas the system manufacture has offered an option (simple plug-in add-on) to be able to transmit full data bandwidth realtime data cablelessly in all circumstances, using a technology known as Mesh WiFi Communications which is different to mesh radio networking, GSL so far has not seen the need. As long as the company can be sure the equipment is working according to specification and to contract, and the hardware is easy to deploy (this cannot be stressed enough, especially when working in challenging terrain) its aims are simply and adequately met using the built-in MRN. Working on Water As stated earlier, it was important for the system chosen to be able to work across water bodies, such as rivers, lakes and shallow marine. One reason the company wanted this ability was that so Continued on page 54 >
Issue 2 2015
Technical News
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< Continued from page 52
Sources and Source Control
much of S E Asia is crisscrossed by water courses of a huge variety and the other is so it could tie in with GSL’s existing marine services.
Given the difficult nature of the environments the company planned to work in, and the flexibility needed, it is important to give some mention to sources and source control. When working in unchallenging locations it is often possible just to use a single source, which is usually vibroseis, or dynamite if the terrain does not suit heavy vehicles.
However, it turns out that not all cableless systems can work very effectively on water. The Sigma recorder chosen by GSL was designed with this capability and the manufacture even offered a special floatation buoy for the purpose. However, GSL found it was possible to use simple floats made from life jackets instead. With this capability, GSL’s very first work for the Sigma recorder included hills, water courses, villages, jungles and shallow water, all using a single recording system, and with the observer in full communication with all equipment the whole time no matter where it was deployed. Finally, before moving on to sources and source control, some mention should be made of GPS. GSL noticed that all these cableless systems rely on being able to receive GPS signals in order to time stamp the seismic data. Even though only a single GPS satellite is necessary for this function, there are times and places where even this is not guaranteed. In such circumstances, the data collected could potentially all be useless. The system chosen, as part of the information it sends across the MRN, includes GPS reception status. This was very important knowing GSL would be working in thick jungle where GPS reception can be intermittent.
But such sources are mostly out of the question for the areas GSL’s envisaged. Instead, the company knew it would have to make use of a variety of (mostly) impulsive sources for its active acquisition work in tight quarters. GSL wanted a more lightweight, flexible and universal solution and believed that the latest weight drop systems could be used successfully in these areas, if they were coupled to the latest source control instrumentation. Most recorders under such conditions simply transfer time break from the source to the recorder location using radio or, in some cases, a pair of wires which obviously would not be convenient for how (with cableless equipment) and where (in tough environments) the company wished to operate. Instead, GSL offered weight drop systems where before dynamite had been used and demonstrated how powerful these can be, especially using multiple thumps per shot point. GSL also wanted to use a more flexible set up of source encoder/decoder pair, a remote radio trigger and source recorder combination from Seismic Source Company. This has many advantages for cableless operations in tough locations. One is that the timebreak is stored independently from the recording system nodes for quality control purposes and future processing, and another is that this combination utilises GPS, when available, to locate the shooter or source unit. In this way, the nodes do not need immediate access to the timebreaks and the source can operate independently of the recording system.
54 Philippine Resources
Using GPS where available, the equipment is able to provide its location to the observer to ensure that recording channels are working for each shot relevant to that source location - as is usually possible with a cable system but usually not possible with cableless, even those which claim not to be shootblind it seemed. Additionally, the process can then be automated which is especially useful when using weight drop systems in difficult areas. Finally, this combination would increase accuracy and help avoid the sort of mistakes which have shown themselves easy to make in the past in such tough environments. For additional backup, GSL also decided to use a Source Signature Recorder, which is an optional device using GPS to mark the location and time of every event, plus record and store any auxiliary data produced by each source device.This is, independent of the recording system and provides a backup record of the acquisition process. It is an important extra tool which can be invaluable to resolve timing and location issues on any field crew operating in tough environments. Passive Operations Until recently,“passive” geophysics meant more to those involved in pursuits such as earthquake monitoring than to anyone thinking of hydrocarbon or mineral exploration. However, in the last few years, the area of geophysics encompassed by the term passive is one that seems to be growing relentlessly. Some of the areas of most rapid growth Continued on opposite page >
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Issue 2 2015
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< Continued from previous page are in frac monitoring, direct hydrocarbon indication, seismic interferometry for imaging body waves, inversion of surface waves to obtain shear wave velocities, provision of extra physical values such as velocities which can be used to improve the active data, and land 4D which is not usually considered a pure passive technique. Soon after starting its active land operations, the company was approached by a client potentially interested in using the company and its equipment to acquire passive data but in very difficult locations.
tually no matter how complex, was essential for GSL for obvious commercial reasons. It only wanted one core type of instrumentation in its inventory so it would have to be extremely flexible and configurable for different jobs if necessary, something which until then was unheard of in land seismic equipment. No single contractor in the world can
Continued on following page >
This was something which GSL expected would happen but perhaps not quite so quickly. It had wanted to ready itself first by preparing in terms not just of equipment (since it understood that the cableless system now in its possession would work equally well for passive and active acquisition) but also wanted access to the necessary processing techniques. However, these first approaches for passive work were only in need of acquisition of data and the client would take care of the processing.
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However, more recently GSL has teamed up with passive processing companies and services providers to offer a much wider range of services.
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It must be understood that taking on a range of passive work requires much more of the recording system than almost any active work can. As has been alluded to, operating in flat desert locations with tens of thousands of channels is relatively simple compared to a few thousand channels in the middle of a hilly rain forest where, for example, weather changes by the minute. But being able to offer services of passive data acquisition in these tough areas is an order of magnitude more difficult for hardware as there are simply so many types of passive work than can be undertaken.
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Having equipment which could be configured to take on active and passive, virPhilippine Resources 55
Technical News
< Continued from previous page claim to know all passive techniques. GSL prefers to discuss with its customers what it is trying to achieve and work side by side the client to come up with the best techniques for that situation. This is why having configurable hardware and access to world experts on passive is so important. CitySeis With a base established in Singapore, and word spreading of the companyâ&#x20AC;&#x2122;s unique success with cableless operations in Indonesia, GSL began to market its capabilities in Singapore and the modern cities of the Middle East and Asia. Here is a different sort of challenge for cableless technology. It is no longer the issue of absorption of 2.4 GHz signals but the interference caused by a large modern city, and the huge number of obstacles, many of which like vehicles come and go. However, the company was surprised about the first job it was awarded as it had not expected to entertain such work. GSL was asked if it could locate gas mains/ pipes laid in a reclaimed area of Singapore. The client already had tried ground penetrating radar but found it to be of little use given the level of the water table in that area. Using a very low impact weight drop and extremely short group interval (33.3 cm) of single geophones connected into the Sigma ground units remotely controlled to be set on very high sample rates, GSL was able to set up, acquire the data and move on in very short time. And the results were excellent, not only locating the desired pipes with extreme precision but also finding other pipes in the same area which the client had not been aware of.
Issue 2 2015
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By adjusting group interval, source energy, sample rates and so on (all made easy by the hardware configuration available) this technique is also about to be used for void location. Such services are of course not considered main stream in terms of land/TZ seismic acquisition but GSL did not set out to be a traditional geophysical service company. It wanted to make use of its hardware for every type of operation, and with a range of work stretching from 2D and 3D (land 4D now also under consideration), jungles to offshore, active to passive, city centres to hills and mountains, the company is very pleased with the unheard of flexibility of the equipment now at its disposal. GSL has recently pioneered two land seismic techniques successfully in Singapore, which can be applied to any urban environment anywhere. 1.The first Multi Client Land Seismic Survey 2. The first High-Res 3D Land Seismic Surveys The point of these surveys was to map the bedrock depth along a specific route for geotechnical reasons Usually soil and geology pre-surveys have to be undertaken along the proposed path, and this has historically been done by drilling bore-holes along the tunnel-path. The Bore-hole method is very good for understanding the exact soil and rock formation at the point of drilling, but the limitation of this method is in not knowing what is in between the subsequent boreholes, usually placed at 25 meter intervals. As the drilling of the path for new construction denser built up areas of the City further problems were encountered, such as trying to drill boreholes within private or otherwise restricted properties. The task of soil and rock bed depth identification became more difficult as the tunnel path was taken underneath shopping centers, schools and apartment blocks, where boreholes can-
56 Philippine Resources
not be drilled. In order to fill the gap left by the absence of bore holes in the area of interest, GSL employed seismic techniques that are more commonly used within the Oil & Gas industry to measure along the proposed tunnel path. Six 3D surveys were subsequently conducted using various combinations of 2D, 3D, reflection, refraction, Undershooting, Multiple cable configuration & push-pull seismic. Conclusion GSL is, to its knowledge, the first company set up to employ cableless technology to acquire both active and passive data, in the most logistically difficult location of southern Asia. During the process of the companyâ&#x20AC;&#x2122;s birth and throughout it first operations it has come to understand certain issues are of great importance for such operations. From our experience, we see almost no reason at all for any company, new or established, to rely any longer only on cabled system unless they are working in the most simple of locations and on the most unchallenging of active surveys. Such conditions seem to be almost the sole preserve of north America and the Middle East. It is our belief and our experience so far that south Asia has no simple environments, where cableless will not easily outperform cabled systems, as long as the hardware has the necessary functionality. Continued on page 58 >
Technical News
Issue 2 2015
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AG&P on rapid growth path in PH, to hire 2K workers for LNG projects
A
tlantic Gulf & Pacific Company (AG&P), an industrial process outsourcing (IPO) firm, has announced it will be hiring more than 2,000 workers to service key liquefied natural gas (LNG) projects in Russia and Australia. Following a successful year in 2014, including winning one of the largest export contracts in Philippine history, the ongoing expansion of AG&Pâ&#x20AC;&#x2122;s workforce represents another win for the local economy. â&#x20AC;&#x153;The Filipino workforce will have excellent opportunities to obtain world-class skills, professional training and hands-
on experience while providing significant value to the local economyâ&#x20AC;? â&#x20AC;&#x153;AG&P continues to play a pivotal role in establishing the Philippines as an engineering and construction hub for key projects in markets such as North America, Australia and Russia. Leveraging our fabrication and assembly expertise, we aim to deliver some of the largest LNG modules ever built, accelerating project construction and minimizing the time to commercial operation. â&#x20AC;&#x153;Over the next three months, we expect to create thousands of jobs to build these complex and exciting modules to the highest levels of safety and quality in our yards at Batangas outside of Manila,â&#x20AC;?
said William Ottiger, Chairman, AG&P. â&#x20AC;&#x153;The Filipino workforce will have excellent opportunities to obtain world-class skills, professional training and hands-on experience while providing significant value to the local economy,â&#x20AC;? he said. AG&P has the largest fabrication yard in South East Asia at over 1.5 million square metres and annual production capacity of 75,000 tonnes. The company has grown rapidly in the last five years from 300 to over 6,000 craftsmen. AG&P provides modular construction and project support services to the offshore and onshore oil and gas, mining, power and industrial infrastructure sectors.
Technical Services and Engineering Personnel Worldwide Br Bright ight ig ht H Heritage erit er itag age e As Asso Associates soci ciat ates es ((H.K.) H.K K.) L Limited also known as â&#x20AC;&#x153;BHALâ&#x20AC;? provides technical and en engineering gineering consulting services dep deployable with minimum notice to any location globally for industrial, civil, oil and gas, offshore, power generation, environment and community interface, telecommunications, and mining industries. We can support projects of any scope and size with our team that includes multi-lingual, multi-skilled, and qualified personnel that has extensive experience working at some of the worldâ&#x20AC;&#x2122;s most competitive and challenging locations. Incorporated in 2003, BHAL is known for its professionalism and corporate integrity. Weâ&#x20AC;&#x2122;re ISO 9001:2008 certified and weâ&#x20AC;&#x2122;re committed to quality service and continual improvement. With BHAL you will benefit from: Â&#x2021; &RQWUDFWHG FRQVXOWDQWV RQ D FRQWLQJHQW EDVLV SURYLGLQJ \RX ZLWK WKH IOH[LELOLW\ WR HDVLO\ DQG cost-effectively accommodate variability in demand and project cycles. Â&#x2021; $ GLYHUVH SRRO RI FRQVXOWDQWV UHVLGLQJ DURXQG WKH ZRUOG UHGXFLQJ ERWK GHOLYHU\ WLPHV DQG FRVWV Â&#x2021; $ VLQJOH SRLQW RI FRQWDFW IRU FRQVXOWLQJ DQG FRQWUDFWLQJ IRU PXOWLSOH WUDGHV DQG VNLOOV VLPSOLI\LQJ \RXU SURMHFWV DQG requirements. Â&#x2021; 2OG IDVKLRQHG YDOXHV FRXUWHV\ DQG D FRUSRUDWH FXOWXUH IRXQGHG RQ KRQHVW\ LQWHJULW\ DQG professionalism. Â&#x2021; ,QWHUQDO VWDNHKROGHUV ZLWK PLQLQJ FLYLO DQG LQGXVWULDO H[SHULHQFH Contact Us: 8QLW 6XELF &UHDWLYH &HQWHU &RUQHU 'HZH\ 0DQLOD $YH 6XELF %D\ )UHHSRUW =RQH Philippines 8QLW & WK )ORRU 8QLWHG &HQWUH 4XHHQVZD\ +RQJ .RQJ 7 3+ _ 7 +. ( FRQVXOWDQWV#EULJKW KHULWDJH FRP _ ZZZ EULJKW KHULWDJH FRP
Philippine Resources 57
Issue 2 2015
Company News
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Top firms claim awards at ASEAN Corporate Sustainability Summit
M
anila Water, Ayala Corporation and IBM Philippines were some of the big winners of the ASEAN Corporate Sustainability Summit and Awards 2015 (ACSSA) as the third year of the marquee event came to a close at the Hotel Intercontinental in Makati City.
Chain Sustainability and Smart Communications for Employee Engagement and Development.
event organized by ECC International and Apex Global, with the theme “Shifting Gears: Fostering Sustainable Value.”
Sustainable Alternative Lighting Corporation, which goes by the acronym “SALt,” took the ACSSA trophy for SME Sustainability Commitment. With headquarters in Muntinlupa City and billing itself as a “social movement,” the firm makes lamps that use tap water and table salt to create light for up to 8 hours, or even charge mobile phones through a USB port.
The awards were held held to support organizations in the process of evaluating their sustainability strategy, performance and goals.
Manila Water, which provides water services to Metro Manila’s East Zone, was cited for having the best Sustainability Strategy among nominees from the South East Asian region. Its parent com- Ivory Education was cited for Acapany, Ayala Corp., gained the nod of the deme Leadership in Sustainable Deawards panel for its Sustainability Report. velopment, and special awards went to Rogie Nichole Aquino of the PaThe local arm of tech giant IBM, meanwhile, mantasan ng Lungsod ng Maynila (for took the award for best CSR and Commu- Youth Innovative Concept Award) and nity Impact, one of the 12 honors given out to SM Cares, the CSR arm of the mall at the ACSSA, where Philippine Resources operator, for its “continuous support Journal was a Supporting Partner. and commitment to building a Filipino society welcoming to persons with auResource efficiency tism and other disabilities.” Manila Water also took the trophy for Resource Efficiency, while a sister firm, Ayala Land, gained the nod for Ethics and Governance. Other winners were Ricoh Asia Pacific for Product and Service Innovation, Nestle Philippines for Supply
Runner-up citations were also handed out to Orient Overseas Container Line, Maynilad Water Services, Energy Development Corporation, Meralco, Habi Footwear, and Megaworld Foundation. The awards capped the three-day
< Continued from page 56
is no challenge for any technology but this is not the case of southern Asia. The requirement to make sure the system really can perform as advertised was probably not necessary with cabled systems as their failure modes were well known.
It is imperative to have available the right equipment and this can only be done by understanding all the problems one expects to encounter and know precisely how technology may help solve those problems. Most manufacturers make wild claims about what their hardware can do. This is only natural but no hardware can break the laws of physics, so our recommendation is to ask for proof that the recorder can do all it is claimed in the area you think you may work. Working in dry climates or flat deserts 58 Philippine Resources
But cableless technology is very different, and unless a contractor can afford to make expensive mistakes by choice of the wrong equipment, then we believe that it is best to get guarantees (especially of communications capability) and, above all, understand how the equipment works. Whereas the industry enjoys huge
Armin Bauer, Principal Economist of the Regional and Sustainable Development Department of the Asian Development Bank (ADB), discussed the “Challenges of Inclusive Growth in Asia” as the keynote speaker. ACSSA gathered sustainability professionals from around the region thanks to its “strong positioning, progressive theming that builds from the feedback yearon-year, and most importantly the drive among the practitioners to exchange, enable and excel,” said Karthik Subburaman, ECC International country manager for the Philippines. Pre-conference workshops on Corporate Sustainability Strategies and Measuring Impacts of Social Programs preceded the two-day conference at the Intercon, attended by hundreds of C-level executives and managers from across South East Asia.
choice nowadays compared to just a few years ago when there were only a few cabled systems with little to differentiate them technically, it is the company’s view that not much of this equipment variety is suited to the unique operating conditions of its target markets in south Asia, especially if any passive or joint active/ passive work is to be considered. GSL believes that a new era is starting in land seismic, fuelled by instrumentation which can be bent to what the geophysicist requires, not the other way round. The trick is now to understand the instrumentation.
Company News
Issue 2 2015
www.philippine-resources.com
New Cone Crusher reduces costs and increases quality
T
he New Nordberg HP5 cone crusher from Metso enables you to produce much finer products using fewer crushing stages, thereby lowering your capital and energy costs. With a combination of optimized speed and a large throw, the HP5 provides the high reduction ratio.
safely removed with no interference. Fast and easy access to all the main components creates a notable impact on maintenance downtime and enables more up-time. Benefits
Due to its highly efficient crushing action, the HP5 delivers maximum power utilization per cone diameter, so you save both with lower energy consumption per ton of end product and a lower recirculation load. A higher cavity density improves inter-particle crushing action for end products with more consistent gradation and superior shape. Getting more production with less energy The HP5 generation crusher is being fitted with in the latest high-efficiency motors. It boasts a higher output of finished the product using the same amount of power. The result is improved overall efficiency and, as a bonus, lower carbon dioxide emissions, making these HP5 cone crushers the most environmentally friendly crushers on the market. Compared with equivalent crushers size, the HP has a higher output capacity and density in the crushing chamber, better reduction ratio, enabling to produce higher on-spec yield end products with the same energy consumption. More up-time, easy to use and maintenance friendly Nordberg HP5 cone crushers advanced the fastening system for the mantle and bowl liner eliminates the need for backing material, and makes liner changes faster. It is also easy to disassemble: all components are accessible from the top or side. The bowl and head are easily and
Field proven for years, Nordberg HP cone crushers are high performers.unique combination of crusher speed, throw, crushing forces and cavity design. This combination is renowned for providing higher capacity and superior product quality whatever secondary, tertiary and quaternary application. •
Energy efficient
•
High performance
•
More up-time and easy maintenance
•
Reliability
Nordberg HP5 cone crusher is controlled by the Metso IC70C™ automation process control system. Metso IC70C™ (process control) automation ensures complete performance and is precisely designed to meet your expectations and crushing plant requirements for consistent production, safety and easy control of crusher parameters. The IC70C (process control) automation system brings precision and consistency to your crusher operations. This leads to predictable and stable production and end-product quality, ensuring
profitable operation of both the crusher and the entire crushing plant. With optimized start-up and shut-down procedures and sequences integrated into the IC automation system, you can be sure that the crusher is working correctly in all circumstances and that crusher downtime is minimized. Metso IC70C (process control) automation allows you to maximize the performance of your high-quality Metso crushers. This is done with carefully defined safety parameters for oil temperature, power draw and oil pressure, which are indicators of the actual crusher load. Metso IC70C (process control) automation monitors the crusher condition and gives an early indication if there’s a problem.This can help solve a problem before it becomes serious and costly.
Philippine Resources 59
Company News
Issue 2 2015
www.philippine-resources.com Issue 1 2015 www.philippine-resources.com
Konercranes lifts local presence with opening of Carmona office
T
he grand opening of the Konecranes Philippines office in May has brought Konecranes’ comprehensive range of overhead cranes, gantry cranes, jib cranes and electric and manual hoists to the country as well as its leading maintenance and inspection services.
our valued customers,” he said.
Konecranes will share the new premises in Carmona (approx. 45kms south of Manila) with its newly appointed dealer for port equipment, AsiaGlobal Technologies Inc. Konecranes port equipment includes stackers, container lift trucks and RTG cranes.
Konecranes is the world’s largest supplier of lifting equipment for industrial purposes. Their products include the most significant innovations developed for overhead crane applications. This industry leading technology is based on their innovation power in mechanical and electrical design, and the application of the most modern industrial manufacturing technology.The reliability of Konecranes industrial cranes and other lifting equipment is both the result of experience and commitment to engineering excellence.
“We are pleased to be able to offer an even better level of service and local support to the Philippines,” says Mr Raymond Dayleg, Country Manager, Konecranes Philippines. “AsiaGlobal Technologies is a reliable dealer and sharing the premises with them will foster good communication and greater service for
“We’re also happy to provide our latest range of diagnostic and maintenance services, including our Crane Reliability Study and well as RopeQ and RailQ diagnostic services,” said Mr Dayleg, whose company is the leading crane maintenance organisation in the world, with approximately 450,000 makes and models of crane under service worldwide.
Konecranes has gained an extensive
Konecranes’ smart new Philippines office.
60 Philippine Resources
and diverse global customer base in lifting businesses. General manufacturing represents the largest single customer segment. Konecranes is also dedicated to improving performance in all kinds of industries. They provide lifting solutions in ports, oil & gas, mining, automotive, warehousing, entertainment, energy, steel, petrochemicals, shipyards pulp & paper and other industries. Maintenance and Diagnostic Services A Crane Reliability Study (CRS) is an engineering assessment that studies the current condition of a crane and provides an accurate estimate of its remaining design life. Konecranes follows this up by providing a comprehensive report and expert consultation with a plan for current and future crane usage, providing a valuable tool when dealing with an aging crane fleet, changes in production, safety issues, or other concerns. Continued on following page >
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Issue 2 2015
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< Continued from opposite page RopeQ is used to evaluate the working condition of wire ropes integral to a huge variety of lifting equipment using advanced, proprietary Non-Destructive Testing (NDT) methods. RailQ accurately measures rail alignment, reduces undue wear and helps users to better plan maintenance and repairs in busy warehouses, ports and manufacturing facilities. Konecranes technologies are designed for industries such as manufacturing, materials handling, shipping and logistics, steel, engineering and mining and energy industries and include the latest CXT UNO and SMARTON cranes.
lifting tasks up to 10t in manufacturing, materials handling and other light lifting tasks in warehouses, assembly lines and factories. â&#x20AC;&#x153;Konecranes has taken the high quality CXT hoist and redesigned it using the latest slimline components. By selecting only the essential features and core components of the robust, proven technology, Konecranes has been able to create a very cost efficient crane, without compromising on quality,â&#x20AC;? says Mr Dayleg. The basis of CXT UNOâ&#x20AC;&#x2122;s steady performance lies in the Konecranes CXT hoist. Its proven technology brings the highest of safety and reliability to working processes. Its excellent design and approach dimensions allow for efficient use of space under the crane.
Latest products The new essentials focused CXT UNO is a high quality, highly economical wire rope hoist suitable for a huge range of
The SMARTON â&#x20AC;&#x153;crane with brainsâ&#x20AC;? maximises safety while minimising downtime through technology highlights such as an intelligent yet easy-to-use Hu-
man Interface to Machine (HIM) system which keeps the user continuously up to date on not only the weight of the load but also its position relative to the available workspace. In addition, the crane monitors its own condition and recommends when and what kinds of inspection or preventive maintenance should be performed. This way, the customer can better plan and minimize maintenance shutdowns, thereby maximising uptime and saving costs. SMARTONâ&#x20AC;&#x2122;s revolutionary design is based on significant improvements in crane technology in proven modular components and features. This means that the crane can easily be updated with smart features, such as automated positioning, extended speed range, defined working areas and TRUCONNECT remote monitoring and reporting to meet changes in the customerâ&#x20AC;&#x2122;s business and process needs.
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Philippine Resources 61
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PROTECT Series 2015: Doing Business Amidst New Threats By Maria Paula Tolentino
T
he country’s premier international conference and exhibition on safety and security, PROTECT recently opened its 10th series of two-day PROTECT Conference series with the theme “Doing Business Amidst New Threats” last March 23-24 2015 at the SMX Convention Center. Day one covered the Threat Landscape, with included the video presentation of ‘Inside Al Qaeda: Global Network of Terror’ author Dr. Rohan Gunaratna who is also an esteemed faculty member and head of International Center for Political Violence and Terrorism Research at Nanyang Technology University Singapore. This presentation was followed by a round table discussion on the Challenging Times: Radicalization, Terrorism and Crime, touching on the intricacies of Cyber Security and Data Protection. After an intriguing examination of the leadership, ideology, structure, strategies, and tactics of the most violent politicoreligious organization the world has ever seen, Dr. Gunaratna presented on Al
Qaeda’s financial infrastructure and how they train combat soldiers and vanguard fighters for multiple guerrilla, terrorist and semi-conventional campaigns in the Middle East, Asia, Africa, Caucuses, and Balkans while probing on the covert Al Qaeda operational network in the West. The scale of terrorism reaching the depths of social media has, consequently, created a following of younger, impressionable minds who have been fed a distorted image of Islam and sense of brotherhood. Leading the round table discussion on understanding the challenging times of radicalization, terrorism and crime, Rappler CEO and Executive Editor Maria Ressa pooled together a distinguished panel in the persons of Steve Cutler (former FBI officer), Hamish De BrettonGordon (Avon Protection) and Bgen Joselito Kakilala (Commander, AFP). During the later part of the day, moderator Fernando Contreras (Founder of Philippine Communications Network, Inc.) led the discussion on Cyber Security and Data Protection. Divided in two parts, the first half focused on the anatomy of a cyber attack whose panel involved eminent representatives from Visa (Murugesh Krishnan, Chief Risk
Officer), ASEAN & Sage (Niel Pandya, Senior Manager Data Security) and Cisco (Gener Camiling, Global Security). The second half deliberated on how to protect and recover from a cyber attack. The speakers included representitives from Fritz & Macziol Asia (Joseph Garcia, Senior Tech. Manager), Microsoft Cybersecurity (Scott Deacon, Cyber Security Architect), AIG Philippines (Mark Lwin, President), Ion Managment Solutions (Stephen Bird, CEO) and ICT Office (BGen Nicolas Ojeda, Director). Day two of the PROTECT series covered discussions that emphasized the protection of a brand, how these threats impact on businesses, and what are the latest global developments affecting security. With a wonderful turn-out of participants and attendees, this latest PROTECT series brought together key officials concerned with security from government and private businesses, suppliers of technologies for security, representatives of international organizations and planners. The only government-private sector partnership devoted to security and safety, this year’s PROTECT series included an exhibition that featured technical/product presentations, workshops/ demos and a networking cocktail. PROTECT international conference and exhibition was organized by Leverage International (Consultants) Inc. since 1995.
62 Philippine Resources
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Issue 2 2015
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Unichamp unveils modern lime facility in Rio Tuba for Coral Bay
U
nichamp Mineral Philippines Inc. has inaugurated its new lime manufacturing plant located on an 8-hectare site at the Rio Tuba Economic Processing Zone in Rio Tuba, Bataraza, Palawan. Its plant at Rio Tuba is a newly commissioned fully integrated modern lime manufacturing facility, developed and constructed based on international standards using Unichamp Groupâ&#x20AC;&#x2122;s inhouse engineering and design in collaboration with its European technology partner, which is the first of its kind in the country. Unichamp Philippines is a PEZA (Philippine Economic Zone Authority) ap-
proved company, and part of the Unichamp Group headquartered in Malaysia. The company was established in the Philippines on January 14, 2011 as a vehicle to undertake the development of the lime plant at Rio Tuba in collaboration with Coral Bay Nickel Corporation (CBNC), a subsidiary of Sumitomo Metal Mining Co. Ltd. of Japan. The Rio Tuba Plant is a special purpose built plant to supply high quality industrial lime in particular lime milk to CBNC, which is used in the neutralization process. Construction started in the first quarter of 2013, fully completed by the Continued on following page >
Unichamp Mineral executive chairman Daniel Lim (left) and president Rommel Ibuna.
Philippine Resources 63
Philippine Resources part of the community < Continued from previous page
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Lycopodium
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Merck
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Metso
3
Mining Philippines
21
Orica
13
Orion Project Services Ostrea Minerals Outotec
5 63 7
Paperless Trail
51
Phil Construct
27
Philippine Mining Luncheon
53
PNG Resources
41
Power Philippines
37
Powertrends 2015
39
QED
Unichamp Philippines has invested more than US$24 million in this state-of-theart facility, which produces high quality lime milk to meet the specifications and demand of CBNC, which had relied on imported slaked lime from overseas suppliers before the Rio Tuba Plant was set-up, said Unichamp Mineral executive chairman Daniel Lim in a press conference. With the Rio Tuba Plant, Unichamp Philippines has created new job opportunities, provided skill training, technology transfer, and know-how to its Filipino staff force, which is the principle policy by which the Unichamp Group observes in all its overseas investments, added Unichamp Philippines president Rommel Ibuna. In addition, the Rio Tuba Plant has also encouraged economic activities of many small local support industries by creating business opportunities to support the development, construction and operation of the plant. The ability of its Rio Tuba Plant to supply locally produced high quality industrial
lime products will help to eliminate the reliance on imports, and thereby reducing the foreign currency outflow of the country, Lim said. Quicklime and milk of lime produced at the Rio Tuba Plant are made from natural limestone, which is sourced locally in Rio Tuba. These industrial lime products are widely used by a multitude of industries in the neutralization process for environmental treatment, soil treatment in agriculture industry, soil stabilization for road construction, water treatment for the production of potable water (drinking water), steel production, sugar refinery, paper industry are among the major uses of industrial lime, Ibuna said. The Unichamp Group has regional presence and operations in Malaysia, Philippines, Laos, Indonesia, Papua New Guinea, and Australia. Unichamp management works closely with its business partners who are mainly in the mining, non-ferrous minerals, chemical, iron and steel, oil and gas and water treatment industries to achieve long-term mutual benefits. Unichamp is grateful for the support of the various authorities and the local Barangays to make its Rio Tuba Plant a success, and the Group is committed to support and being part of the community for the long term.
IFC
Raffles/Fairmont Hotel
43
RDCL
19
RLB
55
SMEC
11
Site Works
17
Start To Finish
45
64 Philippine Resources
third quarter 2014, and was successfully commissioned in the fourth quarter of 2014.
Issue 2 2015
www.philippine-resources.com
A view of Unichamp Mineral Philippines Inc.â&#x20AC;&#x2122;s new lime manufacturing plant at the Rio Tuba Economic Processing Zone in Rio Tuba, Bataraza, Palawan.
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