MANILA, Philippines — Mindanao-based exploration firm SK Liguasan Oil and Gas Corp. (SKLOGC) is spending over P1.9 billion in drilling cost to drill appraisal wells over a seven-year period in the Cotabato Basin, which covers part of the rich Liguasan Marsh.
The P1.92-billion drilling cost is based on the seven-year work program submitted to and approved by the Department of Energy (DOE), SKLOGC CEO Noel Felicia said in an interview with The STAR.
“When you participate in the bidding, we are being vetted by the DOE in three aspects—legal, tech and financial. Part of the technical aspect is the seven-year work program,” he said.
Earlier this month, the DOE awarded a petroleum service contract (PSC) for Nominated Area 9 to SKLOGC under the Philippine Conventional Energy Contracting Program (PCECP), after the agency was authorized by the Office of the President to proceed with the awarding.
The PSC allows the Mindanao-based exploration firm to develop the Cotabato Basin, which covers part of the Liguasan Marsh, said to be rich in oil and gas deposits.
Area 9, located in Sultan Kudarat and South Cotabato, covers one-third of the Liguasan Marsh, Felicia said.
Based on the work program submitted to the DOE, SKLOGC has committed to start drilling a well within the first year or in the next 12 months.
Felicia said drilling of an appraisal well will take 45 days. “We already identified the exact site to drill, which is one-kilometer away from the American site. Once we drill, it we expect to get the gas. We will drill first in Gansing site,” he said.
The company official was referring to the wells drilled by the joint venture of Maremco Mineral Corp. and Anglo Philippine Oil Corp. in the 1960s. While oil and gas shot upward and flared out at encouraging numbers, Anglo-Maremco plugged and abandoned their wells due to high pressure and technology limitations.
Currently, SKLOGC is in the process of getting a drill rig via leasing or acquisition.
“We can lease. There is already a drill rig we’ve already inspected in Batangas. Or we will buy our own. The advice from our drill team is buy our own since there are 12 sites in Sultan Kudarat and 20 sites in Liguasan Marsh,” Felicia said.
Once drilling is done and gas comes out, the company will test the pressure of the gas for one year in compliance with the DOE policy.
“Once gas is extracted, we will connect to a modular plant, which produces three to 10 megawatts (MW). We can supply the whole…of Sultan Kudarat,” Felicia said.
Based on the technical data from the DOE and appraised by SKLOGC’s chief geologist, Area 9 has the potential to contain 3.4 trillion cubic feet (TCF) of natural gas and 4.8 billion barrels (BBL) of crude oil.
In comparison, the Malampaya gas field has proven reserves of about 2.7 TCF of natural gas reserves and 85 million barrels of condensate.
Felicia said if this is proven, Area 9 has the potential of powering up at least 3,400- MW of power plants.
Area 9 covers only one-third of the Liguasan Marsh, which spans 2,200 hectares in the provinces of Cotabato, Maguindanao and Sultan Kudarat, of which 300 square kilometers are classified as protected wetland and bird sanctuary. It is said to have billions of cubic feet of gas and is rich in oil deposits.
The Liguasan Marsh was excluded in the DOE’s Philippine Energy Contracting Round held in 2012 since it was declared as a protected area.
In 1979, about 30,000 hectares of the marsh was declared a Game Refuge and Bird Sanctuary, with an inventory carried out to ensure the preservation of wildlife and aquatic resources.