MANILA, Philippines – The Department of Energy (DOE) is pushing for the completion of a compromise agreement between Philippine National Oil Co. (PNOC) Exploration Corp. and Burgundy Global Exploration Corp to continue the stalled drilling of the Camago-Malampaya oil leg in northwest Palawan.
DOE secretary Jericho Petilla said the negotiations on the compromise agreement are “moving” but the date of signing cannot yet be determined.
The energy secretary added that the compromise agreement “should speed up the drilling” of the oil-rim – a 56-meter thick oil zone located below the 600-meter thick gas cap being produced by the service contract 38 consortium as part of the Malampaya Deep Water Gas-to-Power Project.
PNOC Exploration signed a participation agreement with Burgundy on July 2008, with the latter getting 84.9% interest and the former holding the remaining 15.1%. The Energy Department approved the agreement on September 2008.
In 2011, DOE cancelled the contract of the two companies to develop the oil rim because of alleged “non-compliance” of the provisions of their work commitments.
Oil-rich
The oil rim was discovered in 1991 during the drilling of Malampaya-1. It was considered a separate development from the larger natural gas reserves located in Northwest Palawan. The said oil rim was earlier estimated to contain 41 million barrels of oil and estimated to cost around $1 billion to develop.
“There is really oil. However, as we extract more gas from the Malampaya platform, the pressure in the CMOL oil field will be more difficult to extract. Hence, we need to drill as soon as possible,” Petilla said.
Shell Philippines Exploration B.V., which leads the Malampaya consortium, earlier relinquished its right over the oil rim saying that it was “sub-commercial” in quantity.
The Malampaya oil field had been subject to controversy in the past few months. The Malampaya fund, consisting of royalties collected from the gas field’s operations, had allegedly been siphoned off by reported pork barrel scam mastermind Janet Lim Napoles to her dubious non-governmental organizations (NGOs). (READ: How the Malampaya fund was plundered) – Rappler.com
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