Palau Senators Want Timely Action On Oil Exploration Application

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Environmental Quality Protection Board urged to approve permits

By Jose Rodriguez T. Senase

KOROR, Palau (Island Times, Jan. 29, 2015) – Senators Mlib Tmetuchl and Phillip Reklai have written Environmental Quality Protection Board (EQPB) Chairman Benjamin Adelbai asking for timely action on the oil exploration application submitted by the Palau Energy (PE) and the Kayangel State Government.

PE and Kayangel jointly submitted an application for an Earthmoving Permit supported by a comprehensive 500 plus page Environmental Assessment and an Oil Spill Response Contingency Plan done by a worldwide environmental consulting firm SLR Environmental Solutions and numerous other documents to the EQPB on January 19, 2015. Earlier that same day documents were also submitted to Minister Charles Obichang of the Ministry of Public Infrastructure, Industries and Commerce (MPIIC) requesting an Exploration Permit to drill one test well at Velasco Bank about ten miles from Ngeruangel Reef. The exploration test well will take 15 days to drill and then the well will be plugged with cement and abandoned with no visible environmental impacts the drill cuttings from the mostly 10 inch diameter hole will be kept onboard the ship. No adverse impacts to the environment are expected as a result of the 15 day test.

The Senators letter stated" We are informed that an application for an Earthmoving Permit, Oil Spill Response Plan and numerous other documents have recently been submitted to the EQPB for the Board’s consideration. We are aware as well that after years of study by World Bank’s consultants and other international experts the Republic now has in place comprehensive hydrocarbon legislation to regulate oil exploration and activities of the oil industry as it progresses," the first part of the letter reads. The senators’ letter was dated January 28, 2015.

The two senators noted that due diligence and substantial time and resources have been devoted to addressing environmental issues associated with the plan to explore for oil in the Palau North Bank (PNB) off Kayangel State.

"Additionally and with due diligence, significant time, resources, and stakeholder consultations have been undertaken by the government, Kayangel State and Palau Pacific Energy to ensure that all environmental considerations have been addressed prior to proceeding to drill an exploration test well at the designated site in the waters of Kayangel State," the lawmakers stressed.

"Submitted documents assure as well that following the test drill every measure has been taken to prevent long term adverse effects on the environment and habitat of the test site and immediate vicinity," they added.

The two lawmakers said prompt action on the matter is needed.

"We therefore ask that you take timely action on their application for activities related to the referenced exploration for commercial hydrocarbons in the specified area s of the Velasco Bank in the State of Kayangel. We trust that your prompt and progressive action will significantly move forward this prospective alternative for significant revenues and other benefits for the Republic in the best interest of our people,"

Meanwhile, Howard James Smith, Director of the Palau Energy (PE), clarified that exploratory oil drilling will be done by next month if the MPIIC issues an oil exploration permit.

Palau Energy Pte, Ltd. based in Singapore took the project over as Operator of the Palau North Block Concession from Texas based Palau Pacific Energy who now only retains a 15% interest in the project Palau Energy has an 85% stake and has committed around $15 million for the project.

The EQPB looks into the environmental impact of the project, while the Minister of MPIIC approves and issues the exploration permit.

The findings and recommendations of the EQPB carry much weight on whether the MPIIC Minister approves or denies the application.

According to the oil regulations, the EQPB has 15 days to act on the application from the day it is submitted.

Smith said during oil presentations held in Palau two weeks ago that prompt action is needed for the project to push through.

According to him, the window of opportunity in the coming two months is only between February and March 2015 as the drillship Norshore Atlantic they plan to lease for the project is scheduled to be leased by another company for two years after that date.

He said that if that window is missed, there is great possibility that they would just pull out from Palau, especially that the price of oil have been going down.

"It will be now or never," he stressed.

He said that if exploration permit is issued, they will conduct the exploratory oil drilling in late February early March this year.

The plan is to drill one test well using the "Norshore Atlantic", which is one of the newest and most advanced high tech and environmentally-friendly drillship in the world. The exploration will be completed after 15 days and thereafter, the well will be capped to forestall any environmental damage.

Smith also clarified that the plan is to drill a test well in an offshore area located 10.17 nautical miles (19 km) north of Ngeruangel Island, and not on Ngeruangel Reef, as reported by another newspaper earlier. Traditionally Palauans call the entire area as Ngeruangel Reef but the submerged area to the north is now commonly referred to as Velasco Reef and Ngeruangel Reef/Island area is now a protected area that is over 10 miles south of the drilling site on Velasco..

Island Times tried to contact EQPB Chairman Adelbai for his comment on the letter, but was not able to reach him as of press time.

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