Dutch company invests in Palawan oil, gas exploration

Manila Times
http://www.manilatimes.net/national/2006/jan/06/
yehey/business/20060106bus8.html
Friday, January 06, 2006

Dutch company invests in Palawan oil, gas exploration

By Niel V. Mugas, Reporter

NETHERLANDS-BASED Vitol Group will infuse nearly P4 billion in the Philippines to reactivate oil wells and resume oil and gas production in the northwest Palawan basin.

Energy Undersecretary Guillermo Balce said Vitol, an international marketer of petroleum products, will be infusing about $70 million to finance the reopening of the wells in the Galoc and West Linapacan areas, which are covered by service contract (SC) 14.

Although oil and gas production in the Galoc and West Linapakan wells ended in the nineties, a significant volume of fossil fuels was recovered.

However, this time around, Balce said that the consortium headed by Australian-owned Nido Petroleum, which holds the right to explore and produce from the SC 14 areas, is determined to reactivate the wells to recover a much bigger volume of oil and gas.

Members of the Australian-owned consortium include Oriental Petroleum and Minerals Corp., Alcorn Phils., Alcorn Gold Resources, Linapacan Oil, Gas & Power, Altisima Energy; Basic Petroleum and Minerals, Petroenergy Resources, Phoenix Energy, and Philodrill Corp.

Team Oil and Cape Energy, however, will operate the Galoc field after signing a farm-in agreement with the consortium.

Balce said a combined 77 million barrels of crude oil has yet to be recovered from Galoc and West Linapacan.

“This is even bigger than the Malampaya oil rim, which contains only about 25 million barrels,” Balce said.

The consortium is also planning to reopen and reactivate the wells for oil and gas production by the second half of this year, he said, adding that the consortium will only need to secure environment compliance certificates from the environment department to get the green light.

It will also need to rent an oil rig, which costs $150,000 to $400,000 daily.

Besides its interests in the African oil industry, the Vitol Group is one of the world’s foremost oil trading companies with a wide range of activities encompassing exploration, refining, and shipping. Its product portfolio includes a range of fuels, chemicals, and liquefied petroleum gas.