Galoc operator told to resume production

MANILA, Philippines – The Department of Energy (DOE) has ordered Galoc Production Co. (GPC) to proceed with commercial oil production at the Palawan oil field after the successful completion of the extended production test (EPT).

Energy Secretary Angelo Reyes told GPC to immediately terminate the EPT operation after the DOE concluded that sufficient data have already been obtained and the viability of the field has been established.

Reyes said GPC could now proceed with commercial production of the Galoc field as indicated in the plan of development approved by the agency in March 2006.

He also stressed that starting June 20, 2009, the National Government will receive its 60-percent share of the revenue from sales generated by the Galoc field.

“Of course, this is only the start for future oil production in the country. This is a clear indication that the country is a viable investment location and we hope that this will entice future investors to set up their businesses here,” Reyes said.

In 2008, the Galoc field produced 20,000 barrels a day in the first 90 days of commercial production.  

Once production has stabilized following flow testing to be undertaken over the coming weeks, production is expected to reach about 20,000 bpd from the two wells with an average of about 17,000 bpd over the remainder of 2008.

The value will provide for six percent of the country’s daily oil demand. The utilization of indigenous resources has been advocated by the DOE to promote savings in tariffs and importation duties.

GPC said the “reservoir performance data obtained during the EPT indicate that the production from the Galoc field is commercially viable” and that the data obtained proved “invaluable in providing sufficient confidence in reservoir performance to justify commencement of long-term production.”