Crude oil flows in Panay

by ERNAN BALDOMERO and DAVID ISRAEL SINAY/ PNS

SAN JOSE, Antique – The joint venture of the Philippine National Oil Company (PNOC) Exploration Corporation and the Petronas Carigali Overseas on oil exploration confirmed the presence of crude petroleum deposit off Maniguin Island in Culasi, Antique in Panay Island.

Aired over yesterday’s Reklamo Publiko, Gov. Salvacion Perez confirmed the presence of oil in the area as established by the exploration. On Saturday, outgoing Energy Secretary Raphael Lotilla said an estimated 160 million barrels of petroleum crude oil is found in the area based on the study conducted by the PNOC.

The area under exploration covers 1,466,700 hectares, which includes offshore areas east and south of Mindoro and West Panay. The joint undertaking of exploration, classified as ‘Exploration Wildcat,’ proposes to dig approximately 160 meters depth well (KAMIA-1). The exploration was awarded on January 2005 with contract terms of exploration for a period of seven years – divided into three sub-phases. Currently, the exploration is on the first sub-phase with Service Contract 47.

Under the joint venture, Petronas Carigali Overseas shall lead the discovery with a percentage share of 80 percent of the exploration while 20 percent of the responsibility will be under the supervision of PNOC’s Exploration Corporation. The exact location of the exploration is at (latitude) 11°30’ 15.407” N, (longitude) 121° 38’ 42.089” E. Raymundo Savilla, PNOC exploration manager, said the oil deposit is believed to be connected with the Malampaya gas pipe line in Palawan. Salvilla said oil presence in the area was accidentally discovered when oil slicks attributed to diesel used in mud system, and encountered good reservoir sands and oil-prone source rocks were detected.

Lotilla said the oil exploration, located some 12 kilometers off Maniguin Island belonging to the municipality of Culasi in Antique province, is very significant in the country’s resurging petroleum exploration industry as this will be the firs well to be drilled in the last three years.

The P800 million (US$14.4 million) joint venture under Service Contract 47 will operate next month. Among the salient features of Service Contract 47 consists of conditions that the contractor (Petronas) has option to enter the next sub-phase or terminate the contract before the end of each sub-phase.

Likewise the seven-year term would be extendible for three years upon justification. The contractor would be given 25 years once the development and/or production period has been successful and is renewable for a series of five-year period but shall not exceed 15 years.

Salvilla recalled that on October 20, 1982, Philips Petroleum undertook project Maniguin A-IX. On August 15, 1994 under the Maniguin 2 project, Kirkland Resources Company drilled on the area and confirmed that an oil leg has flowed 300 barrels of oil.

The drilling, however, was stopped because the oil discovered was found non-commercial at that time. But, Salvilla said a series of tests was furthered conducted which yielded that the oil discovered lately in the area has a high hydrocarbon potential, and the high quality petroleum source rocks with organic richness and excellent generative capability has penetrated the Maniguin-2 project and is also being considered as one of the riches in Southeast Asia.

“The Maniguin-2 project has flowed more than 300 barrels of petroleum deposit during open hole tests and gas seepages, oil slicks on the water surfaces and oil was recovered from seabed cores in Tablas Strait,” Salvilla said.

Environmental concerns

The place of exploration is only 58 kilometers away from Boracay Island, the country’s top tourist destination. However, to allay fears of oil seepage and other untoward incident that would cause environmental hazards, Lotilla assures the public that oil exploration and later on production would comply strictly with environmental laws.

“The drilling operations for the wells (KAMIA-1) will conform with the PNOC-Exploration Corporation’s health, safety and environment (HSE) policy and DENR regulations,” Lotilla emphasized.

A certificate of Non-Coverage (CNC) from the DENR’s Environment and Management Bureau (EBB) of Region VI issued last August 2, 2006 that will comply with established environmental regulations and policies for exploration projects.

Lotilla said the consortium will also secure an ECC from DENR after the exploration is done and during the drilling operation and to formulate a mechanism for protecting the environment.

Lotilla said that based on the thrust for energy independence despite of the oil crisis feared to hit the country, the promotion of oil and gas exploration is a very significant undertaking.

Besides Maniguin exploration, a series of explorations is also being conducted in other areas such as Sulu Sea near Palawan being done by Middle East-based, American and British companies, Salvilla added.

Petronas will pay for the cost of exploration and developing of the area and will get 80 percent of the profit while the rest will go to the national and local government. Maniguin would be the drop-off point of the project.