MANILA, Philippines – The Department of Energy is eyeing more service contracts within the controversial, but highly prospective Recto Bank (internationally known as Reed Bank), as soon as it completes its own evaluation of existing seismic studies.
According to Energy Secretary Jose Rene D. Almendras, the DOE expects to have initial indications of the viability of prospects within the Recto Bank by 2012, after which it may consider offering more service contracts in that area.
“If we find good reason to do it, then (we will offer more service contracts), just as soon as we finish the studies,” he noted.
“The reason why we’re not offering (SCs) in the Recto Bank is because we’re still in the process of finalizing the data. The studies for those areas still need to be completed before we can even go out and offer. It’s hard to offer when the data are not ready,” Almendras explained.
The Recto Bank is part of the Spratlys chain being claimed partly or wholly by the Philippines, China, Vietnam, Malaysia and Brunei. The Recto Bank, however, is about 80 nautical miles west of southwestern Palawan province, well within the Philippines’ (370-kilometer) 200-nautical mile exclusive economic zone (EEZ).
“The Recto Bank has been developed by the Republic of the Philippines since 1976. We have started exploring that area since 1976 and we have issued six service contracts, five of which are non-exclusive geo-technical evaluations,” Almendras said.
“We have actually drilled seven wells in the area since 1976 to present. Nobody questioned our right to that area. There are findings there. That is why we decided to do more explorations and to do better analysis. Initial findings from the Recto Bank are very encouraging,” the energy chief added.
Previous studies have shown that the Recto Bank could contain some 3.4-trillion cubic feet of gas and potentially 440 million barrels of oil. It is believed to host a much bigger deposit of oil and gas than the adjoining Shell-operated Malampaya gas field, the country’s only gas production field to date.
Currently, only one company, the UK-based Forum Energy Plc, has been granted a service contract (SC 72) covering parts of the Reed Bank.
Last March, Forum Energy reported that it has already completed the necessary seismic surveys over the Sampaguita gas field, allowing the company to identify the best drillable targets within the highly rich prospect.
Given the resources covered by SC 72, Forum Energy had said that it was even enough to form the foundation of a liquefied natural gas (LNG) project, similar to the Malampaya deepwater-to-gas power project.
A number of options can be made available to Forum Energy for marketing the gas produced from Sampaguita gas field, which included establishing a new LNG export facility; building a pipeline to access capacity in Shell Exploration BV’s existing infrastructure at the Malampaya; and selling into the Philippine market.