Oil Discovered in Cebu

[BratPAQ]

Oil discovered in Cebu close to shore | ABS-CBN News

MANILA, Philippines -- A new oil discovery in Cebu declared by the Department of Energy is expected to augur well for the Philippines, which is heavily dependent on imported oil.

Australian firm Gas2Grid formally announced the approval by the Energy Department of its application to declare the Malolos-1 oil well on the shore ofCebu as an "oil discovery."

"The company advises (announces) that the Philippine Department of Energy has formally recognised Malolos-1 as an oil discovery and approved an extension of SC [Service Contract] 44 in order to conduct oil production with the aim of establishing a commercial oilfield," Gas2Grid said in an announcement.

Earlier Gas2Grid managing director Dennis Morton said application for declaration of an oil discovery is the first step in appraising and developing the Malolos oilfield.

Commercial production

"When approved by the DOE it will provide an additional minimum period of 12 months to flow test the well and establish commercial production. Following the completion of that work and with the DOE's approval of commercial status, the Malolos oilfield will enter a 25 year production phase.

Morton added that available technical data also indicated the possibly that Service Contract 44 "is much larger Malolos oilfield than initially assessed."

Service Contract 44, covers 750 square kilometres in central Cebu.

Gas2Grid successfully perforated and flow tested two oil bearing sandstones in Malolos-1.

"Oil was produced on short term test at indicative production rates of between 100 to 200 barrels of oil per day (bopd) ... Previously drilled wells, Malolos-1 and Malolos-4, recorded oil bearing sandstones over a 496 metre (1,627 feet) vertical interval. The recent oil test production rates (between 100 - 200 bopd) confirm Malolos-1 as an oil discovery well.

"We are confident that further testing of Malolos-1 will result in commercial oil production from a much larger Malolos oilfield than currently assessed," Gas2Grid said.

Although measurements and testing in Malolos-1 proved that the well can produce oil at rates between 100 to 200 barrels per day, "initial assessment of the oil volume potential within the Malolos oilfield is a 'Contingent Resource' oil in place in the two oil productive sandstones in the range of between a 'Low Estimate' (1C) of 4 million barrels and a 'High Estimate' (3C) of 42 million barrels, with a 'Best Estimate' (2C) of 12 million barrels of 'Total Oil Initially in Place'."

Land proximity

Another advantage of the onshore Malolos oilfield is its proximity to land which makes transporting its products and establishing a pipeline highly feasible and commercially viable. Most of the oilfields in the country are located far offshore and required relatively bigger investments in terms of infrastructure.

Little is known publicly concerning the discovery but a July 18, 2013 service contract for Malolos 1, provides the following description: "The Malolos Oil Field is located some eight kilometres by road from the Cebu's western coast.

Oil transportation options from the Malolos Oil Field include road transport by a new, all weather, concrete road from the well site to coastal port options at nearby Aloguinsan (8 kms - less than 10 minutes by road) or the larger, established port of Toledo (32 kms - 30 minutes by road). One option would be to load the oil onto marine transport for sale either to one of two oil refineries located in Batangas, Philippines (approximately 500 kms north) or in Singapore."

Although there had been gas finds in the Philippines, most of the wells are located offshore and require considerable investments to extract.

I want to understand, although test stage pa lang, if this pulls through, will there be any significant impact on our fuel prices? Bababa ba sya to level of Malaysia? or wala lang to?

[dr. d]

Oil discovered in Cebu close to shore | ABS-CBN News



I want to understand, although test stage pa lang, if this pulls through, will there be any significant impact on our fuel prices? Bababa ba sya to level of Malaysia? or wala lang to?

it will probably not make a dent in our pump prices. but at least, we have another spigot to tap...
but we better hurry.... the chinese might claim it as theirs...

[uls]

Oil discovered in Cebu close to shore | ABS-CBN News



I want to understand, although test stage pa lang, if this pulls through, will there be any significant impact on our fuel prices? Bababa ba sya to level of Malaysia? or wala lang to?

nope

refiners will buy the oil at market price parin

[cardict]

nope

refiners will buy the oil at market price parin

Ayan na mga tsekwa ready to declare Cebu part of their 9 dash line and EEZ

[vinj]

We gotta wait for it to actualize before we can start counting on it... Laking investment din yan and they still have to further determine the actual find.

So, is Cebu part of Some China special economic zone already?

[basti08]

Mamaya lang, territory na din yan ng China LOL!

[boybi]

nope

refiners will buy the oil at market price parin

But if the oil find will be substantial, the government may subsidize the local pump prices from the earnings from the Cebu oil.
Also, mababawasan ng import duties ang oil from Cebu.

That is, if the investors and their government counterpart will not be greedy and just pocket the extra earnings/savings and not pass it on to motorists/consumers.

[shelu]

i doubt if it will lead to lower pump price. ibebenta ng gobyerno yan sa refineries, ang kita non, gaya ng dati, kukurakutin nila. ergo, walang epek sa ordinaryong mamamayan.

[innova2006]

tama kukurakutin lang ng mga government officials yan na greedy at tataasan pa ang presyo ng gasolina at diesel

[badkuk]

Guys patanong naman...i checked out gas2grid's website, apparently this discovery is part of an area called SC-44 for which they have exploration rights.

How does that work? Who "owns" SC-44? Does it mean they can drill wherever they want?

[ghosthunter]

But if the oil find will be substantial, the government may subsidize the local pump prices from the earnings from the Cebu oil.
Also, mababawasan ng import duties ang oil from Cebu.

That is, if the investors and their government counterpart will not be greedy and just pocket the extra earnings/savings and not pass it on to motorists/consumers.

Any earnings/savings from the oil field will go to some sort of "social fund" then later the money will suddenly vanish into the bottomless pit of a half dozen politicians....

[falken]

But if the oil find will be substantial, the government may subsidize the local pump prices from the earnings from the Cebu oil.
Also, mababawasan ng import duties ang oil from Cebu.

That is, if the investors and their government counterpart will not be greedy and just pocket the extra earnings/savings and not pass it on to motorists/consumers.

Like the Malampaya gas fund, it'll go to the crooked politician's pockets again.

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[Monseratto]

Yung Malampaya gas pumupunta sa mga electric generators...but do you see your electric bills going down???

[SiRbossR]

Well, I hate to expect but this is the Pelipens isn't it?

[jut703]

Oil companies only buy at whatever price prevails in the market. In that respect, they are customers.

If they are able to get it at a lower price, this is good for the oil company as it will mean lower primary costs, and higher bottomline. However, if one of them decides to sell at a lower price, the rest will follow suit. Usually the initiative to drop prices stems from the wholesale market dropping prices too low that retail has to follow suit or the industry can crumble.


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[uls]

kung commercial production taon pa yan ... if it ever happens

keep in mind Pinas ito

Republika ng Press Release

[yebo]

100-200 BOPD.

read it again guys. That's ONE HUNDRED -TWO HUNDRED BARRELS OF OIL PER DAY. 1 barrel of oil is equal to 159 liters, so that is 15900 - 31800 liters per day of oil. It is but a drop in one very big bucket.

the only reason it is economically viable is it is close to shore, close enough to put s short pipeline and then truck it.

[ghosthunter]

Oil discovered in Cebu close to shore | ABS-CBN News



I want to understand, although test stage pa lang, if this pulls through, will there be any significant impact on our fuel prices? Bababa ba sya to level of Malaysia? or wala lang to?

It will not make any effect to our fuel or power prices because the well production is simply too small. BUT if this is a start of a LARGE oil field that can produce tens of thousands of barrels a day, then we might actually see some effects (if it doesn't get diverted to some politician's pocket like what happened to the natural gas well fund).

[Gumusut_Amige]

Assuming 350k bpd ang daily consumption natin...then this oilfield discovery will not even create a small ripple at the gas pump pricing. Im going to revisit this thread again once they hit more significant oil reservoir deposits.

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[romeocharlie]

Ang alam ko pangit ang quality ng oil na meron tayo dito sa pinas.. Hindi sya suitable to be refined just like yung iniimport natin from kuwait... Plus the reserve is very scarce not worth to be explored...




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