The Department of Energy expects a banner year for the upstream oil industry as the existing petroleum service contract holders have committed to drill a record 10 to 12 oil and gas exploration wells for 2012 alone, according to Energy Undersecretary Jose M. Layug Jr.
On top of the 12 wells to be drilled, the DoE is also expecting three more workover wells this year.
Layug identified the companies undertaking the drilling activities as Blade Petroleum for Service Contract 6 Cadlao Block in offshore northwest Palawan; Galoc Production Co. for SC 14C (northwest Palawan); PNOC Exploration Corp. for SC 37 in the Cagayan Basin and SC 63 in southwest Palawan; Gas2Grid for SC 44 in the Visayan Basin; and CIMP for SC 49, also within the Visayan Basin.
Drilling wells this year would also include Frigstad Energy for SC 50 in northwest Palawan; Pitkin Petroleum for SC 53 in the Mindoro-Cuyo Basin and BHP Billiton for SC 54 and SC 59, both within southwest Palawan, Layug added.
Australian firm Otto Energy Ltd. earlier announced that it was also planning to drill a well within the Cinco prospect covered by SC 55 this year.
“We have seen an upturn in investments in the Philippine upstream petroleum industry this year as a result of the current high oil price market condition and the efforts of the DoE to revitalize the industry,” Layug noted.
“We have launched the Philippine Energy Contracting Round 4 for petroleum last year and formed the Philippine Upstream Petroleum Task Force under Executive Order No. 60. The Aquino administration, through the DoE, has focused on resource development as a long-term plan of action in the hopes of finding indigenous oil and gas resources to reduce our dependence on imported petroleum and mitigate the effects of oil price volatility,” he further explained.
Layug admitted that the surge in drilling activities was quite unusual and it was something that the Philippine government did not see often. He said that service contract holders might have decided to fast-track their respective work programs given the fact that oil prices were high and that the government was providing a conducive environment for such activities.
The overwhelming response of oil and gas exploration companies could also be seen in the keen interest they showed in the PECR 4.
Under the PECR 4, the government offered contracts to explore and develop 15 highly prospective oil and gas blocks, located at Cagayan, Central Luzon, Northwest Palawan, Mindoro-Cuyo, East Palawan, Cotabato and the Sulu Sea.
The PECR 4, which was launched last June 30, is envisioned to address the Philippines’ energy supply through the exploration of local indigenous resources. Harnessing local resources is expected to help the country meet its daily demand and reduce the importation of petroleum and petroleum products.
According to the DoE, it expected at least $7.5 billion worth of initial investments to be infused in the local oil and gas sector over the next several years if all the 15 contracts were to be awarded to investors.
The amount approximated the maximum investments required during the exploration stage alone, Energy Secretary Jose Rene D. Almendras earlier said.
During the exploration stage, companies will be drilling three to five wells. Should these companies push through with their petroleum projects, the actual development and production may require bigger investments.