This will allow Cadlao Development Co. Ltd. (Cadco) and VenturOil Philippines Inc.—which jointly own the Service Contract 6 license—to start producing oil by the end of November next year at a rate of 10,000 to 15,000 barrels per day. Cadlao Development holds an 80-percent interest in the service contract while the balance is owned by VenturOil.
“I think (the Cadlao field) is the only production imminent field in the Philippines right now. Everybody’s drilling but they’re exploring. We’re drilling to produce. We’re going down for the oil and produce it in about a year’s time,” noted VenturOil CEO Francis C. Abad.
On the sidelines of the Upstream Energy 2012 conference, Abad said the $47 million will be used for the drilling of the two wells to be called Cadlao 4 and 5. These wells will be drilled anytime between the end of the third quarter and the beginning of the fourth quarter. The partners will later mobilize the platform for oil production.
“We expect to produce the first barrel at the end of November 2013,” he said.
Six months after the first oil is produced, Cadco and VenturOil are expected to drill one or two additional wells to enable them to tap the estimated 5.9 million reserves in the Cadlao field. These reserves are expected to last about four or five years, according to Abad.
The oil to be produced will be sold locally.
“It’s easy to sell oil. We have to market it to the oil companies in the Philippines, but the objective is to achieve the highest price in the Philippines. There is no set [price] index on the Cadlao oil but I’ve never seen oil of this high quality. This means it will not be hard to sell this oil because it is easier to refine. The better the quality of the oil, the better the yield for refiners,” Abad explained.
Once oil production in Cadlao is underway, Abad said the company would look at the possible exploration of adjacent prospective blocks like the Bonita field.
“We’ve identified a few prospects nearby so that our facilities can reach them. We’re still waiting for the Department of Energy’s approval,” Abad said.