THE GOVERNMENT EXPECTS TO RECEIVE anytime this week its first share from the oil sales generated by the Galoc oil field in offshore Palawan, under Service Contract (SC) 14C.
According to a government source, the Department of Energy (DOE) is expecting to collect at least $170,000 from the latest oil shipment made by the consortium operating the Galoc field. The amount will go to the national coffers.
The Galoc consortium declared that the oil field was commercially viable in June. The declaration?which signified the completion of the extended testing period, as required under the terms agreed with the DOE?also confirmed that the field?s reservoir has enough volume for long-term production.
As a consequence, the fiscal terms for the Galoc project have reverted to the standard terms of SC 14C. This means project proponents now have to remit the necessary royalties or payments to the government.
Of the oil field?s gross sales, 70 percent would go to investors in the service contract to recover costs and expenditures, while the remaining 30 percent would be divided between the government and the contractor under a 60/40 sharing agreement.
Prior to the declaration, the consortium?s activities were under the so-called extended production test, which meant these were undertaken to determine whether or not the project was commercially viable and to justify the commencement of long-term production.
?Production will be continued from the existing two wells. Meanwhile, assessment of the potential for additional incremental development is underway,? said oil field operator Galoc Production Co. (GPC).
GPC holds a 59.84-percent working interest in the SC 14C license, while Nido Petroleum Philippines Pty. Ltd. has a 22.28-percent stake. Other stakeholders in the service contract are Philodrill Corp., Oriental Petroleum and Minerals Corp./Linapacan Oil Gas and Power Corp., and Forum Energy Philippines Corp.
As of end-June, production from the Galoc oil field has already hit over 2.2 million barrels since it first went on stream in October 2008.