Galoc moves forward with investment decision

PRODUCTION from the Galoc oil field in the North West Palawan Basin, offshore Philippines, is set to increase following approval of a final investment decision (FID) on the Phase II development of the site.
Operator Galoc Production Company, partly owned by WA oil and gas company Otto Energy, and its joint venture partners signed the FID in September.
The development includes the drilling of two new subsea wells that will tie back to the existing floating, production, storage and offloading (FPSO) vessel Rubicon Intrepid, and the installation of a second production riser and control umbilical expected to further improve system reliability.
The joint venture has secured the use of Diamond Offshore’s Ocean Patriot semi-submersible drilling rig to carry out the drilling program.
First oil from the new wells is anticipated in the second half of 2013.
A final decision will be made later this year regarding the drilling of a third potential subsea well to the north of the field, following the completion of the initial drilling program.
Total field production rates are expected to increase from 5600 barrels of oil per day to more than 12,000bopd as a direct result of the upgrade.
Otto chief executive Gregor McNab said the development was a great opportunity for the company.
“The Phase II FID is a significant achievement for Otto, our joint venture partners and the Government of the Philippines,” he said. “Galoc Phase II represents a low-risk, near-term opportunity for Otto to extend the field life of its cornerstone producing asset, as well as deliver incremental reserves and improve production reliability.
“This continues the work that has successfully delivered key outcomes for Galoc since Otto became operator last year, including the FPSO upgrade and reserve increases.”
The total capital expenditure for Phase II is expected to be US$188 million, with $62 million funded by Otto in line with its 33 per cent working interest in the project.
WA-based venture partner Nido Petroleum will contribute US$43 million as part of its 22.88 per cent interest. Nido managing director Phil Byrne said the investment was money well spent.
“The Galoc Phase II development delivers incremental reserves and extends the field life, and as such it is a key element of our strategy to maximise value from our producing and development assets in the near term,” he said. “We are pleased to reach such a significant milestone in advancing the Galoc Phase II development.”

Leave a Reply

Your email address will not be published.

* Copy This Password *

* Type Or Paste Password Here *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>