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BRINGING
the country closer to its goal of energy independence,
the Department of Energy (DOE) said the Galoc oil field
off Palawan commenced production of oil on Thursday.
The DOE
said the first well was opened at 10.45 a.m. and oil was
onboard at 11.20 a.m.
“We
embrace this significant development as this will help
immensely in our pursuit to be energy self-sufficient.
We are expecting to get 20,000 barrels a day in the
first 90 days of commercial production,” Energy
Secretary Angelo Reyes said in a statement.
He said
the projected output will provide for 6 percent of the
daily oil demand of the country. “We are on the right
track in utilizing our indigenous sources,” he added.
In a
time of uncertainty in oil prices, Reyes said Galoc’s
first oil will benefit the Philippines by making the
country less reliant on imported crude oil and save
millions of dollars in importation cost.
Jeff
Davison, Galoc Production Co. chief operating officer,
said the development of any offshore field presents a
unique set of challenges—particularly so for a small
field in a remote location like Galoc.
Davison
said they invested three years of committed and
concerted efforts to bring the Galoc field into
production.
“Achievement of this milestone is a credit to the
Department of Energy, which has worked relentlessly to
promote oil and gas activity in the Philippines, our
joint venture partners and our key contractors. It is a
momentous day for us all,” said Davison.
Once
production has stabilized following flow testing that
will be undertaken over the coming weeks, production is
expected to reach about 20,000 barrels of oil per day
from the two wells with an average of about 17,000
barrels of oil per day over the remainder of 2008.
The
reserves estimate in Galoc is approximately 10 million
barrels, based on an assessment in 2006 for a 2-well
development. Assessment of the ultimate potential with a
view to further development will be undertaken during
the initial six months of production.
The
Galoc Field was discovered in 1981 with further
appraisal undertaken in 1988, but was not developed at
that time owing to a combination of risks associated
with the reservoir and low oil price.
Since
then, advancements in technology have both improved the
capability of defining the reservoir and reduced the
number of wells needed to access the reserves—as
successfully achieved with the recently drilled
horizontal development wells Galoc-3 and Galoc-4.
DOE said
present production is from the first well, with the
second well due to come on-line shortly.
The
current development was initiated in mid-2005 when Galoc
Production Company WLL (GPC) farmed in to the existing
Service Contract SC14-C Galoc Sub-Block.
GPC is
jointly owned by a subsidiary of Vitol Group and Otto
Energy Ltd. It is working with joint- venture partners
Nido Petroleum Pty Ltd, Oriental Petroleum and Minerals
Corp., The Philodrill Corp., Forum Energy Philippines
Corp., Alcorn Gold Resources Corp. and PetroEnergy
Resources Corp. to rapidly appraise and bring the Galoc
Field into production.
DOE said
the progress has been dependent on availability of the
necessary drilling rig, completion of the FPSO, and most
recently, several typhoons affecting conditions at the
offshore field.
Meanwhile, Malacańang is confident the Galoc field can
produce enough oil to help reduce dependence on imported
oil and ease rising food costs.
Executive Secretary Eduardo Ermita, who called a special
briefing to announce the extraction of fresh oil from
the Galoc oil field in the northwest offshore of Palawan
that morning, said the government expects to save $1.4
billion in foreign exchange, “for the country, for the
well’s entire lifetime—at least for the present
development–which should be for three to five years.”
He said
“the President is optimistic that this new development
will positively impact on the administration’s efforts
to reduce the country’s annual oil importation of US$6
billion, and in turn contain the increasing cost of food
and other commodities,” Ermita said. (With M. Gonzalez) |
