Cotabato City – The Department of Energy (DOE) and the Ministry of Environment, Natural Resources, and Energy (MENRE) have awarded the first Coal Operating Contract (COC) in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). Filipinas Systems, Inc. (FSI) was granted the contract for coal exploration in the municipalities of Kapai and Tagoloan II in Lanao del Sur. This represents a major milestone for the energy development of BARMM.
The awarding ceremony was held on October 24, 2024, at the Bangsamoro Government Center in Cotabato City. Notable attendees included BARMM Chief Minister Ahod Ebrahim, Energy Secretary Raphael P.M. Lotilla, and MENRE Minister Akmad A. Brahim. The event underlined the ongoing collaboration between the National Government and BARMM in pursuit of regional energy self-sufficiency and economic growth, under the leadership of President Ferdinand Marcos Jr.
This milestone builds on the July 2023 co-signing of the Intergovernmental Energy Board (IEB) Circular, a key framework that allows the joint awarding of Petroleum Service Contracts (SCs) and COCs in the region. The IEB Circular has paved the way for BARMM’s energy independence by formalizing the collaboration between the National and Bangsamoro governments in the responsible exploration and development of local energy resources.
Energy Secretary Raphael Lotilla described the awarding of the contract as a landmark event, emphasizing the partnership’s importance. “The awarding of the 1st COC in BARMM is a landmark moment for both governments. It reflects our collective commitment to advancing energy development and resource management in the region, empowering the BARMM to play a key role in the country’s energy future. This partnership will not only foster energy independence for the Bangsamoro region but also create pathways for sustainable economic growth and development,” Lotilla said.
The contract with FSI includes a two-year exploration program, with an investment of PhP19 million. Should the project transition into the development and production phase, FSI has pledged PhP150,000 annually in scholarships to support local residents from the contract area. Additionally, FSI will provide PhP250,000 as a signature bonus, PhP250,000 for development assistance, and annual training funds starting at PhP75,000 during the exploration stage, rising to PhP200,000 during production.
In his remarks, Lotilla also outlined how fossil fuels, including petroleum, gas, and coal, would be managed jointly by the National and BARMM governments. He noted that while renewable energy sources, apart from Lake Lanao’s hydropower, fall under BARMM’s jurisdiction, the national government is fully committed to helping the region develop its solar, wind, geothermal, and other renewable energy resources.
This coal exploration project is seen as a potential step toward reducing the Philippines’ heavy dependence on imported coal, which currently accounts for over 80% of the country’s supply. At present, 98% of coal imports come from Indonesia, and domestic coal production could ease this reliance.
For BARMM, the signing of the IEB Circular and the awarding of this contract mean greater control over its energy resources, opportunities for local economic development, and the potential for community upliftment through job creation, improved geological knowledge, and enhanced infrastructure.
This historic collaboration will shape the future of energy governance in the Bangsamoro region, fostering growth while ensuring responsible resource management.
