In Aloguinsan: Moratorium on oil exploration granted

CEBU, Philippines - The Department of Energy has approved a two-year technical moratorium on the oil exploration in the Malolos-1 Oil Field in Olango, Aloguinsan, Cebu by an Australian firm, Gas2Grid Limited.

 The moratorium, the company said, will provide sufficient time to complete studies and establish the appropriate completion technology for maximizing sustainable oil production and if successful will lead to full oil field appraisal/development.

 “SC (Service Contract) 44 currently in 2 Year Technical Moratorium until 27th January, 2017,” read the announcement posted on its website.

 DOE said the company continues with technical work in conjunction with industry experts who are analyzing all available technical data to identify the completion technology that will minimize sand and clay production to avert production blockage and maximize oil production rates.

 Preliminary results indicate the preferred method to complete the new wells will be with standard, industry screens. The installation of screens as opposed to perforated casing should maximize and sustain oil production whilst retaining the reservoir sand and producing the clay fines.

 Studies are also being conducted on the open-hole mud and hydraulic program designed to minimize formation damage and maintain well-bore stability. Recent surface geological mapping has also been completed and integrated with previous work leading to a more detailed understanding of the surface geological structure.

 The crest of the Malolos anticline has been confidently located approximately 2.5 to 3 kilometers south-southwest of Malolos-1.

 “With all technical data now available this is likely to be a better location for testing the Malolos surface anticline than the existing Malolos wells locations,” it said.

 The forward program will either incorporate the deepening and deviating of the existing Nuevo Malolos-1 or the drilling of a new well. Planning of the well’s design is continuing.

 Gas2Grid said the Malolos Oil Field still represents an attractive investment opportunity despite the recent oil price drop and the immediate effect that it has had on the oil industry worldwide.

 The Malolos Oil Field reportedly has a 20.4 million barrel “Best Estimate (P50) Contingent Resource” of good quality, low sulphur crude oil that is located onshore, close to transportation in a country with excellent fiscal terms.

 “This could result in very low development and operating costs which will leave a healthy profit margin, even at the current low oil price,” Gas2Grid said. — (FREEMAN)