A consortium led by Galoc Production Co. Inc. (GPC) will start works on the country’s first new oil field development in 15 years, the Department of Energy (DOE) announced yesterday.
GPC country manager for the Philippines Kay Palma told reporters in a press briefing that the consortium will pour in a total of $86.4 million for the exploration project, which has an estimated oil reserves of 10 million barrels.
About 77 percent or $65 million of the project cost will come from GPC and the rest will be shouldered by other consortium members that include Alcorn Gold Resources, Forum Energy, Nido Petroleum, Oriental Petroleum, PetroEnergy Resources and Philodrill.
GPC, on the other hand, is composed of three companies: Granby, Cape and Vitol.
The GPC-led group will specifically explore the Galoc field off Palawan under Service Contract 14C. Barring any exploration glitches, the first oil production in the project will start by March 2008.
Energy Secretary Angelo Reyes lauded GPC’s initiative to start the drilling process in the area.
He said the Galoc field development is expected to increase the country’s current monthly oil production of about 17,000 barrels to about 500,000 barrels.
“This project also marks several other milestones being the first oil field development in the country in 15 years after West Linapacan, and the first offshore development in seven years after Malampaya,” he said.
Reyes added that this project is part of the DOE’s intensive search for indigenous energy sources aimed at ensuring energy security for the country.
Located about 65 kilometers northwest of Palawan, the Galoc field was discovered in 1981 by Philippine Cities Service and yielded oil during production tests in the late 1980’s but was never commercially developed.
Skyrocketing oil prices and new oil development technologies have made the current efforts economically viable. Two deviated horizontal wells in 290 meters of water will be initially drilled by GPC to penetrate 1,600 meters of the oil-bearing sandstone reservoir two kilometers beneath.
Production will be coursed through a floating production storage and offloading (FPSO) facility and the field will be tested during the first six months to enable a thorough assessment and optimization of the subsequent commercial production.
Jeff Davison, GPC chief operating officer said, the company “is delighted about the imminent commencement of the Galoc field development and the rapid progress is a testament to the progressive and cooperative nature of our Philippine partners, both public and private.”