MANILA – An Australian-Filipino consortium is set drill a new deepwater exploratory well in the West Philippine Sea, hoping to unlock a commercially viable oil reservoir, the Liquefied Petroleum Gas Marketers’ Association (LPG-MA) said in a news release Sunday.
The private consortium that runs petroleum Service Contract (SC) 55 will spud the Hawkeye exploratory well on August 1, immediately after the July 31 arrival of the super deepwater drillship Maersk Venturer on site, according to House Deputy Minority Leader and LPG-MA Rep. Arnel Ty.
“We applaud the consortium’s resolve to push through with the drilling of the well, at a time when many oil and gas explorers around the world have abandoned their search for new hydrocarbon deposits amid the 50-percent plunge in oil prices,” said Ty, who speaks for the minority bloc in the House energy committee.
“This new drilling underscores the strategic economic value of the West Philippine Sea, which is the source of most of the country’s productive offshore oil and gas fields, and is believed to hoard stacks of hydrocarbon that, once harnessed, could enable the Philippines to become self-sufficient in its future energy needs,” Ty added.
“Fortunately, SC 55 is not situated in contested territory in the West Philippine Sea,” Ty said.
In March, Department of Energy (DOE) granted a force majeure on a separate petroleum exploration concession in the West Philippine Sea — SC 72 — because it falls within the disputed area that is now the subject of a United Nations arbitration process between the Philippines and China.
Forum Energy Plc, the operator of SC 72, had no choice but suspend all exploration work over its contract area “until further notice from the DOE.”
SC 72 covers the gas-rich Recto (Reed) Bank, a disputed area that is farther northwest off Palawan compared to SC 55.
Best estimate: 112 million barrels of oil
Meanwhile, the SC 55 consortium is spending a fully funded $24.5 million (P1.1 billion) to drill the Hawkeye well.
The group is composed of Australia’s Otto Energy Investments Ltd. (operator, with 78.18 percent interest), Red Emperor Resources NL (15 percent), and Palawan 55 Exploration and Production Corp. (6.82 percent).
Palawan 55 is a wholly owned subsidiary of Trans-Asia Petroleum Corp., a Philippine Stock Exchange-listed entity controlled by businessman Ramon R. del Rosario Jr.
Philippine stock market speculators have pushed up Trans-Asia Petroleum’s share price by more than 200 percent year to date, ahead of the scheduled drilling.
In a statement issued when Otto contracted the 60,000-ton Maersk Venturer, Otto chief executive officer Matthew Allen said: “Final preparations for the drilling of the Hawkeye-1 exploration well are considerably advanced. This is a very exciting time for Otto as we undertake this important and potentially high impact, drilling event on behalf of the Philippines DOE and our joint venture partners.”
Based on extensive studies, Otto said Hawkeye could possibly contain a “best estimate” of 112 million barrels of oil.
The company added that Hawkeye is nearby Cinco, another SC 55 prospect believed to contain up to 2.4 trillion cubic feet of natural gas – nearly.
Otto said the Hawkeye well is expected to take around 23 days to drill from the Maersk Venturer’s arrival until release.
“Should the well encounter hydrocarbons, more detailed evaluation, including well logging, will be undertaken, which would increase the overall cost by up to $3 million,” Otto said.
SC 55 is a deepwater block in the southwest Palawan Basin, covering an area of 988 hectares.
“The block is the middle of a proven regional oil and gas fairway that extends from the productive Borneo offshore region in the southwest, to the offshore Philippine production assets northwest of Palawan. SC 55 is not located in disputed territory,” Otto said.
Ty said the DOE has issued a total of 29 SCs allowing private foreign and local firms to seek out new oil and gas basins throughout the country, with the promise that the Philippine government would get ample royalties once resources are discovered and harvested.
Of the 29 SCs, the lawmaker said 16 cover offshore areas in northwest, west, and southwest Palawan, all within the West Philippine Sea.
“Actually, besides the Malampaya natural gas wells, there are other wells in offshore Northwest Palawan that continue to produce small amounts of oil, including Cadlao, Octon, Bonita, Nido, Matinloc, and Galoc,” Ty said.
The largest hydrocarbon deposit ever discovered in the Philippines, Malampaya is believed to contain up to 2.7 trillion cubic feet of natural gas and 85 million barrels of condensate.
Malampaya now yields 146 billion cubic feet of gas every year, and the fuel drives three of Luzon’s largest power plants that are based in Batangas.
As of March 2015, the Philippine government has also earned some P208 billion from Malampaya, which is being run by the SC 38 consortium of Shell Exploration Philippines B.V., Chevron Texaco Malampaya LLC, and PNOC Exploration Corp.
Read More: http://www.interaksyon.com/business/114455/amid-territorial-dispute-aussie-pinoy-group-to-start-drilling-for-oil-in-west-philippine-sea