MANILA – The government has embarked on an earnest program to search for oil reserves last experienced during the term of former President Ferdinand Marcos Sr., the father of the incumbent, amid skyrocketing prices of fuel.
President Ferdinand Marcos Jr. said the Department of Energy has initiated the oil hunt through the revival of the drilling operations around the Cadlao oil field in Palawan of Nido Petroleum Philippines.
The firm, operated by Australian firm Sacgasco, holds Service Contract 6B to conduct surveys “by the last quarter of this year.”
“While it is the first step, it signals the government’s intent to maximize indigenous resources and has attracted strong interest from foreign investors in the Philippine upstream oil and gas sector,” Marcos said.
Some US$72 million worth of investments are expected in the two drilling activities of Nido Petroleum Philippines Pty. Ltd. in northwest Palawan, the Department of Energy said.
DOE Undersecretary Alessandro Sales said Nido aims to spend US$16 million each for drilling Service Contract (SC) 6B and SC 54.
An additional US$40 million will also be spent for the extended production test in the Cadlao oil field, he said.
Sales said the extended production test in SC 6B aims “to determine how to optimize future production and determine the more appropriate way in installing the permanent production facilities”.
“Foreign investors have taken the assurances made by the Philippine government that our PD (Presidential Decree) 87 framework for giving incentives to the service contractors is going to be upheld,” DOE Secretary Raphael Lotilla said.
Lotilla said the ultimate objective of the policy is to yield the maximum benefit to the Filipino people and to assure just returns to participating private enterprises.
Sales said the drilling activities in Cadlao are expected in the first half of 2023, with the extended production testing running up to six months.
If the drilling activity is successful, permanent production is expected by the first half of 2024, he added.
President Marcos Jr. has directed the DOE to focus on expanding and harnessing the country’s indigenous energy resources to achieve energy security and affordable electricity prices.