Mindanao oil firm eyes drilling of 2 rigs

MANILA, Philippines — Mindanao-based exploration firm SK Liguasan Oil and Gas Corp. (SKLOGC) is looking to acquire two rigs to start drilling in six to eight months after securing a service contract from the government.

On Wednesday, the Department of Energy (DOE) signed a petroleum service contract (PSC) with SKLOGC after the agency was authorized by the Office of the President to proceed with the awarding of a service contract.

Now with an official PSC, the new oil and gas player is now securing funds to acquire two drill rigs to commence drilling as soon as possible, SKLOGC chief executive officer Noel Felicia said in an interview with The STAR after the signing ceremony.

“Once our investments arrive, we will buy in two drill rigs in Houston, Texas... (we hope to start drilling) around September or October,” he said.

Felicia said the company would need an investment of $50 million since one rig costs $20-25 million.

The company decided to purchase drill rigs since the PSC has multiple site prospects – 12 sites in Sultan Kudarat and 20 sites in Liguasan Marsh.

Apart from acquiring rigs, SKLOGC will also beef up its team with technical experts, Felicia said.

“Each well will need 120 technical people, from petroleum engineers, geologists, mining engineers,” he said.

SKLOGC chief geologist Noel Lucas said drilling would start in the Gansing prospect, which will be a 24/7 operation and will take 40-45 days.

“Drilling is the next phase since the site is already mature to have drillable prospect,” he said.

Lucas said results of the seismic data were promising with some challenges of high-pressured gas.

“For 45 days, we hope we hit the right spot for oil and gas. If it is natural gas, then we will bring in a modular power plant,” Felicia said.

SKLOGC will then test the pressure of the gas for one year, as per DOE policy. Then a certificate of commerciality will then be submitted to the Office of the President.

“We expect everything to take place in three years,” Felicia said.

The PSC allows the Mindanao-based exploration firm to develop Area 9, which covers part of the Liguasan Marsh said to be rich in oil and gas deposits.

Based on its seven-year work program submitted to and approved by the DOE, SKLOGC is spending over P1.9 billion to drill appraisal wells.

The company has also committed to start drilling a well within the first year, or in the next 12 months.

Area 9 of the Liguasan Marsh, located in Sultan Kudarat and South Cotabato, covers one-third of the Cotabato Basin.

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.

It was excluded in DOE’s Philippine Energy Contracting Round held in 2012 since it was declared as a protected area.