Australian-Asian group bags 6th oil search deal

The Department of Energy (DOE) has given out another oil and gas drilling contract, the sixth this year, to an Australian-Asian consortium.

Energy Secretary Vincent S. Perez said the DOE awarded Service Contract (SC) 50 with a group composed of Ottoman Energy Ltd., AustralAsian Energy Ltd. and RGA Resources Inc. for an oil and gas exploration in Northwest Palawan basin.

SC 50 is the eighth petroleum contract signed over the past 15 months and the sixth awarded since the Supreme Court ruling on the Philippine Mining Act last December.

Perez signed the contract with AustralAsian chief executive officer Ken Fellowes for the consortium.

"The momentum is really here. The Philippines has great petroleum potential just awaiting discovery," Perez said.

Fellowes, in behalf of the group, said the seven-year exploration period will determine the reserves and commercial visability of the Calauit field

A recent review by the consortium prior to the signing of the contract indicated that water-free production rates of up to 15,000 barrels of oil per day could be potentially achieved.

"The Philippines has certainly gained the confidence of the international players in the exploration business after a very favorable decision of the Supreme Court on the Mining Act. That has put us back on the exploration investment map of the world," Energy Undersecretary Guillermo R. Balce, for his part, said.

Balce noted that companies joining the partnership for oil and gas exploration include China, Japan, Malaysia, Kuwait, Singapore and Australia.

SC 50 covers 172,000 hectares in the Northwest Palawan basin. It hosts the South Calauit oil fields which contain existing proven oil reserves. A 155-day extended production test in 1997 showed water-free production at 6,500 barrels of oil per day. The complete exploration and production of the field, however, was later halted due to the presence of water.

In the first 18 months of the exploration period, the consortium will carry out a full evaluation of the Calauit 1B well by drilling a horizontal well.

"By drilling a horizontal well on the top of the reservoir it is possible to intersect some 25 open fractures. And by limiting production to 600 barrels for each contributing fracture, no water encroachment is expected until at least significant depletion of the reservoir has occurred," the consortium said.

The AustralAsian consortium is expected to infuse some $10.2 million for the seven-year initial exploration period.

AustralAsian chairman Rufino B. Bomasang, former president of PNOC-Exploration Corp., lauded the government’s very aggressive efforts in the development of the petroleum industry as shown with the expeditious finalization of the contracts.

"The Philippines has a very good oil and gas potential. Our consortium is here for the long run," Bomasang said.