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MANILA, Philippines - The Department of Energy (DOE) has resurrected a plan to draw oil from the Malampaya natural gas field.
Undersecretary Jose M. Layug Jr. said the government has tapped Shell Philippines Exploration B.V. (SPEX) for a new study on the Camago-Malampaya Oil Leg (CMOL).
"The new challenge is, when it was awarded in 2006, the pressure was good. So we were hoping that oil would be extracted, but over time the pressure depletes and makes it difficult to extract the oil, particularly when the (natural gas) reservoir is being used," he said.
CMOL contains an estimated 41 million barrels of oil beneath the gas reservoir of the Malampaya field in offshore Palawan.
The natural gas field is run by SPEX in partnership with Chevron Malampaya LLC and Philippine National Oil Co.-Exploration Corp. (PNOC-EC).
The oil project was held by PNOC-EC and Burgundy Global Exploration Corp. until last year when the DOE cancelled their contract for "non-compliance" with the terms and conditions of work commitments.
With the contract cancelled, "we now have legal basis to bid out the oil rim anew," Layug said. The bidding, however, will be contingent on the results of the proposed study.
CMOL is a 56-meter thick oil zone below the 600-meter thick gas cap produced by the Malampaya.
The oil rim was discovered with the drilling of Malampaya-1 well in 1991 but was considered as a separate development from the much larger natural gas reserve.
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