DOE approves farm-in deal between Philodrill, Swiss firm Vitol GPC

The  Department of Energy (DOE) has approved the farm-in agreement of a consortium of Philippine companies led by Philodrill Corp. to Vitol GPC Investments S. A. covering Service Contract 6A in Octon, Northwest Palawan.

The farm-in agreement calls for Vitol spending 100 percent of the cost of exploring and developing the service contract area by bringing it into production, in exchange for 70 percent equity in the service contract.

Vitol is the largest independent oil trading company in the world based in Geneva, Switzerland, with a network of 20 offices worldwide, covering every segment of the physical oil market. 

The company is involved in refining, storage, shipping and marketing. The company moved in excess of four million barrels of crude oil and products per day in 2006, generating revenues of $121 billion.

Energy Secretary Angelo Reyes said that this will be Vitol’s second involvement in the Philippine upstream petroleum industry. 

“The first being the development of the Galoc oilfield which will commence next month with the arrival of the drillship Energy Searcher. Full production is expected in the first quarter of 2008,” he said.

This positive development  came after Vitol president and CEO Ian Taylor visited the Philippines last month.

Taylor witnessed the signing of the joint operating agreement between the Filipino consortium consisting of Philodrill, PetroEnergy Resources Corp., Anglo Philippine Holdings Corp., TransAsia Oil & Energy Development Corp., Vulcan Industrial & Mining Corp., Forum Energy Phils. Corporation (Forum), Philex Mining Corp., Alcorn Gold Resources Corp. and Vitol GPC Investments S. A.

“Vitol is very pleased to have received approval from the Department of Energy to pursue the opportunity to farm-in to Service Contract (SC) 6A,” Taylor said.

“The proximity of the SC-6A area to the Galoc field, in which Vitol has an indirect 40 percent interest through its shareholding in the Galoc Production Co., makes this a potentially interesting addition to our upstream portfolio,” Taylor said.

Reyes, on the other hand, said the agreement, together with several others to follow, is a clear indication of the trust and confidence of the investing public, both foreign and local, in the prevailing attractive Philippine business environment in general, and in the energy sector in particular.