Galoc oil field restarts operations

MANILA, Philippines — The Galoc oil field has restarted operations this year after Service Contract (SC) 14C1 joint venture (JV) underwent restructuring with the goal of optimizing production and extending the economic life of the country’s largest oil producing oil field offshore northwest Palawan.

The Galoc JV has awarded a multi-million-dollar contract for the operations and management (O&M) for the Galoc oil field to Scotland-based offshore operator Three60 Energy Operations Management, Tamarind Resources Pte. Ltd. said on its website.

Based in Kuala Lumpur, Malaysia, Tamarind Resources owns 55.88 percent equity and operatorship of the Galoc oil field through NPG Pty Ltd (formerly called Nido Production Galoc Co.), which has a 33 percent participating interest, and Galoc Production Co. 1 (GPC1) with 22.88 percent.

Under the contract, THREE60 Energy will operate and maintain the oil field for 18 months or from Feb. 1, 2021 to Sept. 30, 2022.

“Under the terms of the life of field contract, THREE60 Energy will carry out O&M duties on behalf of the Galoc JV, with the objective of improving performance and extending the field’s economic life,” Tamarind Resources said.

“As well as generating further local employment opportunities, the Galoc JV will benefit from the international expertise and competency of THREE60 Energy, especially in managing late field life operations,” it said.

SC 14, which covers Block C1 or the Galoc oil field, has a term up to Dec. 17, 2025.

Production in the Galoc oil field was supposed to stop in September last year after Rubicon Offshore International, its floating production storage and offloading (FPSO) service provider, issued a termination notice in March of the same year.

However, the production halt did not materialize after a new strategy was developed to continue production operations in the Galoc oil field, based on a regulatory filing of Oriental Petroleum and Minerals Corp. (OPMC), a minority partner in the Galoc JV with 7.78505 percent.

Then operator Galoc Production Company (GPC) brokered the purchase of FPSO Intrepid between Rubicon Offshore International and its parent firm Tamarind Resources Pte. Ltd.

Tamarind Resources gained full control of the FPSO starting August 1 last year through Upstream Infrastructure Holdings (UIH), which arranged a new bareboat charter with the Galoc JV to remain and continue production from the Galoc oil wells.

Meanwhile, a separate O&M contract was negotiated with Rubicon Offshore International for the six-month transition period from August 2020 to January 2021 to allow its senior management staff, FPSO crew and production technicians to continue carrying out operations of the FPSO Intrepid.

“Tamarind is leasing the FPSO Intrepid to the Galoc JV on terms that are mutually beneficial to both parties and most importantly, enable the Galoc JV to continue production and the economic life of the Galoc field,” Tamarind said.

The Galoc JV underwent a major organization restructuring last year.

On Sept. 14, Kuwait Foreign Petroleum Exploration Co. (KUFPEC) announced its withdrawal from the Galoc JV. Prior to its departure, KUFPEC held a working interest of 26.84 percent.

Its participating interest was then allocated to its remaining partners, Philodrill Corp., NPG and Forum Energy Philippines Corp. GPC1 and Oriental Petroleum declined to accept their pro-rata share, which were then passed on to NPG.

Following the reallocation of KUFPEC’s participating interest, NPG raised its stake from 22.88 percent to 45.83 percent, Philodrill from 7.21 percent to 10.18 percent, and Forum from 2.28 percent to 3.21 percent.

GPC1 and Oriental Petroleum maintained their share at 33 percent and 7.79 percent, respectively.

Meanwhile, GPC1 announced its resignation as operator on Dec. 23, 2020. It nominated sister firm NPG to succeed as operator of the Galoc oil field.

To restart the operation of the Galoc oil field, the Galoc JV submitted the 2021 operations work program and budget during the operating committee meeting (OCM) on Dec. 9, Philodrill said in a regulatory filing.

“The proposed budget of $23.4 [million plus a contingent budget of $1.184 [million] for the potential restartof operations of the G4 well was approved by the SC 14C1 (Galoc) JV,” it said.

The G4 well, one of the four producing wells of the Galoc oil field, had been offline since January 2019.

The Galoc JV conducted a full-field review study for the reappraisal of Galoc reservoir, which “indicated seven million barrels (MMbbls) of technically recoverable oil left in Galoc,” Philodrill said.

The review also predicted an additional 800 barrels per day (BPD) could be produced from the successful restart of G4 well.

The Galoc oil field is one of the 22 active petroleum service contracts in the Philippines. It has been in production since 2008 and has yielded nearly 20 MMbbls of oil since then.

There are four producing wells that flow into FPSO Intrepid which has 450,000 barrels of storage capacity. Since 2019, only G3, G5 and G6 wells were operating.

In 2019, the Galoc oil field accounted for 96 percent of the total production of the country, making it the largest oil resource.

Last year, the Galoc oil field maintained a high level of efficiency despite the operational challenges presented by the COVID 19 pandemic, producing 694,673 barrels of oil – higher than the projected 688,000 barrels in the 2020 work program and budget.

From its August 2018 acquisition of Galoc, Tamarind said has been working to bring to life the field life extension and production optimization projects.