After 11 days of production, the exploration company Galoc Production Co. (GPC) reported on Monday to the Philippine Stock Exchange it expects the first cargo of crude from the Galoc Field would be shipped in the first week of November.
It added well test had been done and while the data has yet to be analyzed, GPC said performance is consistent with expectations and steady production of 18,000 to 20,000 barrels a day is anticipated the next few days.
The crude is referred to as Palawan Light owing to its similarity with Arabian light and Umm Shaiff, as GPC noted that Galoc crude has an API of 36.1 with no adverse contaminants. API is the American Petroleum Institute’s inverted scale of the relative density of crude—the higher the index number, the lighter the crude, which also indicates its higher value.
“We embrace this significant development, since 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,” said Energy Secretary Angelo Reyes in a statement.
He said the projected output is equivalent to 6 percent of the daily oil demand in the country. “We are on the right track in utilizing our indigenous sources.”
In a time of uncertainty in oil prices, Reyes said Galoc’s first two oil wells will benefit the Philippines by making the country less reliant on imported crude oil and save millions of dollars in import cost.
Jeff Davison, Galoc Production Co. chief operating officer, said the development of any offshore field presents a unique set of challenges—particularly for a small field in a remote location like Galoc.
Davison said his company 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.”
Once production has stabilized, output is expected to reach about 20,000 barrels a day from the two wells with an average of about 17,000 barrels a day over the remainder of 2008.
The reserves estimate in Galoc is approximately 10 million barrels, based on an assessment in 2006 for a two-well development. The ultimate potential of the area with a view to further development will be done in the 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.
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.
