Philippines Galoc Field Development – First Oil

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9 October 2008

In a joint press statement, Energy Secretary Angelo T. Reyes and Jeff Davison, Chief Operating Officer (COO) of Galoc Production Company (GPC) announced Galoc Field has commenced production of oil on 9 October 2008. The first well was open at 10.45am and oil was onboard at 11.20am.

“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. That will provide for 6% of the daily oil demand of the country. We are on the right track in utilizing our indigenous sources,” Sec. Reyes said in a statement. “Opening the country for more investment opportunities such as this one will eventually benefit everyone.

In a time of uncertainties in oil prices, this will benefit the country and make us less reliant on imported crude oil and save millions of dollars in importation cost,” he concluded.

Jeff Davison, COO of GPC, on the other hand, stated that “development of any offshore field presents a unique set of challenges – a small field like Galoc in a remote location particularly so. The GPC team has invested 3 years of committed and concerted effort 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.”

Both Sec. Reyes and Mr. Davison expressed deep satisfaction over the success of achieving oil production from the Galoc Field. Once production has stabilized following flow testing which will be undertaken over the coming weeks, production is expected to reach about 20,000bopd from the 2 wells with an average of about 17,000bopd 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 6 months of production.

The Galoc Field was discovered in 1981 with further appraisal undertaken in 1988. The field was not developed at that time due to the 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 resulted in the need for fewer wells to access the reserves than previously necessary. This has been successfully achieved with the recently drilled horizontal development wells Galoc-3 and Galoc-4. Presently 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. Since that time GPC, which is jointly owned by a subsidiary of the Vitol Group and Otto Energy Limited, has worked in conjunction with its joint venture partners; Nido Petroleum Pty Ltd, Oriental Petroleum and Minerals Corporation, The Philodrill Corporation, Forum Energy Philippines Corporation, Alcorn Gold Resources Corporation and PetroEnergy Resources Corporation to rapidly appraise and bring the Galoc Field into production. 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.

The Galoc field is located in Service Contract SC14-C (Galoc Sub Block) in 290m of water approximately 65km north west of Palawan in the Republic of the Philippines. The development involves the construction of two subsea completed horizontal production wells, with extended reservoir contacts, tied back to a Floating Production Storage and Offloading (“FPSO”) facility via a short seabed pipeline and mid water riser system. Most likely oil reserves as estimated at time of commitment to the development in 2006, is approximately 10 million barrels. The reserves estimate and requirement for additional wells and facility capacity will be reassessed following an analysis of results from initial field production performance.

The participating interests in the Galoc Field are as follows:
Participant Participating Interest %

  • Galoc Production Company W.L.L.1 (Operator) 58.29
  • Nido Petroleum Philippines Pty Ltd 22.28
  • The Philodrill Corporation 7.03
  • Oriental Petroleum & Minerals Corporation/
  • Linapacan Oil Gas & Power Corporation 7.57
  • Forum Energy Philippines Corporation 2.27
  • Alcorn Gold Resources Corporation 1.53
  • PetroEnergy Resources Corporation 1.03

1 Galoc Production Company is owned by;

  • Vitol 68.6%
  • Otto Energy 31.4%

Further information on GPC and the Galoc Field can be obtained from:

  • GPC’s website

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