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Manila to produce oil at Malampaya field in 2 yrs

HEMSCOTT

Manila to produce oil at Malampaya field in 2 yrs

MANILA, Sept 24 (Reuters) – The Philippine government expects to start oil production from its largest natural gas field in less than two years, a senior official said on Wednesday.

Unlisted domestic firm Burgundy Global Exploration Corp will extract crude deposits at the Camago-Malampaya gas field off the coast of Palawan island in western Philippines, along with state-run Philippine National Oil Co-Exploration Corp.

The gas field is run by a consortium headed by a unit of Royal Dutch Shell.

‘This is a highly technical operation but we will succeed because oil is there. We will start production in less than two years,’ Eduardo Hernandez, director at PNOC-EC, told reporters at the signing of the government contract awarding the Camago-Malampaya oil project to Burgundy and PNOC-EC.

Hernandez said the recoverable oil reserves were between 20 million and 40 million barrels.

The Philippines imports nearly all its oil requirements but domestic production is expected to rise 70 percent to slightly more than 40,000 barrels per day when

the Galoc oilfield, with an expected output of 17,500 bpd, starts production later this year.

Burgundy is to take an 84.9-percent interest in the project, valued at $700 million, while PNOC-EC has the remaining 15.1 percent.

Burgundy will invest an initial $173 million into the project, said company president Rogelio Serafica.

Malampaya is the Southeast Asian nation’s biggest hydrocarbon discovery, supplying nearly all of its natural gas and powering three generation plants with a combined capacity of 2,700 megawatts, around a fourth of the installed capacity on the country’s main Luzon island.

(Reporting by Manolo Serapio Jr.; Editing by Clarence Fernandez) 

24  September  2008

Copyright Thomson Financial News Limited 2008. All rights reserved.

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