Galoc oil field to remain viable in 2 years

MANILA, Philippines — Listed upstream oil and gas firm PXP Energy Corp. expects the Galoc oil field, the country’s largest oil producing oil field offshore northwest Palawan, to be viable in the next two years with rising global oil prices and major changes in the consortium.

“With improved contract terms and as long as the current oil price continues to stay at $60 to $70 per barrel, our operations in the Galoc field will remain viable at least in the next two years,” PXP Energy president Daniel Stephen Carlos said during the company’s virtual stockholders’ meeting last week.

PXP Energy, through Forum Energy Philippines Corp., has a 3.21 percent participating interest in the Galoc JV.

Earlier this year, the Galoc JV awarded a multi-million-dollar contract for the operations and management (O&M) of the Galoc oil field to Scotland-based offshore operator Three60 Energy Operations Management.

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

“The operator GPC was able to negotiate a deal that includes the purchase of FPSO while retaining Rubicon as offshore operator during transition period, thereby enabling production to proceed beyond September last year,” Carlos said.

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.

“Oil production continued throughout the year despite the initial decision of Rubicon Offshore International, owner of the FPSO, to terminate its operations and maintenance contract starting September,” Carlos said.

Because of this, Galoc was able to produce around 695,000 barrels of oil in 2020 or average 1,900 barrels per day amid the COVID-19 pandemic. This is a slight decrease from the 746,000 barrels in 2019.

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