Energy Undersecretary Guillermo Balce said this is the first time that an India-based oil company will invest in the Philippine upstream oil and gas development.
He said the Department of Energy (DOE) and the Indian firm are now finalizing the contract. "We hope to sign a contract soon," he said.
The DOE expects to sign seven more oil and gas exploration contracts this year. These contracts are estimated to raise about $80-million worth of investments in the first two years of the project.
Normally, each drilling contract lasts for seven years. The first two years involve about $6-million to $10-million investment. The succeeding years which will involve actual drilling of wells would be more expensive. Drilling of a deep well will cost $15 million each while shallow well costs about $6 million.
Balce said they hope to sign one Service Contract next week. He did not identify the company.
According to Balce, most of the areas to be drilled this year have been tested before. "Most of them are old prospects. We hope to conduct more tests on these areas," he said.
Last month, the DOE signed a SC 45 with a Filipino-owned Aragorn Power and Energy Corp. (APEC) for an oil and gas exploration in the Cagayan Valley Basin.
SC 48 is the second petroleum service contract signed this year and the fourth since the Supreme Court declared the Philippine Mining Act as constitutional.
The DOE has awarded SC 45 to China’s South Sea Petroleum Holdings Limited Service Contract 45 to explore oil and gas in the Agusan-Davao Basin.
It also awarded SC 46 to Japan Petroleum Exploration Co. Limited (Japex) for oil and gas exploration over the Tañon Straits in Negros Occidental.
The energy department also recently awarded SC 47 to a joint venture of Petronas Carigali Overseas Sdn Bhd and PNOC Exploration Corp. (EC) for a petroleum exploration block in offshore Mindoro.
Two other petroleum service contracts were awarded in 2004. These were Singapore-based firm Gas to Grid Pte. Ltd. in the Central Cebu area and British firm Premier Oil Philippines B.V. over the Ragay Gulf in the Bicol region and parts of Bondoc Peninsula in Quezon province.