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The oil discovery in Cebu, Philippines is now being prepared to produce commercial oil. This is the latest news from Gas2Grid, the Australian firm that has discovered the potential source of oil in the country. Once this ambitious project pushes through, Philippines will less depend on the Middle East.
Late last month, Gas2Grid Ltd. announced its work program for 2015 wherein the Department of Energy (DOE) has granted them a 2-year Technical Moratorium. For the first year of its work commitment, the firm aims to invest$100,000 in the thorough research and design in the testing of producing oil.
With the estimate calculation of the Service Contract 44 (SC 44) of Gas2Grid to produce a maximum of 12 million barrels per day, the firm will also conduct new petrophysical analysis on Nuevo Malolos-1, which was drilled in late 2006. This amazing oil discovery is located in Aloguinsan, Cebu.
For the second year, which will start on January 28, 2016, the Australian firm is set to make a complete research through the assistance of oil and industry experts, finalize the open-hole design, complete the well for producing commercial oil, and start of testing the commerciality of the test produced oil.
This project needs an estimated fund of $1 million and will end on January 27, 2018. Once the test was been completed and declared successful, Gas2Grid is set to apply for a 25-year oil production term, wherein additional local jobs are expected and can lower the gas prices in the Philippines.
According to Gas2Grid, the company has already met with selected companies to invest at Malolos Oil Field, which they claim as a very attractive investment opportunity. The firm also believes that the political climate in the Philippines is stable, noting that the government is very supportive on the project.
This discovery of oil in the Philippines has been reported in local news in January 2014, when DOE Secretary Jericho Petilla revealed that the department has extended its contract with Gas2Grid. That time, the company formally declared that Malolos-1 is indeed an oil discovery.
Under the contract, the DOE will receive a 60% profit share while the remaining 40% will go to Gas2Grid. The company noted that this is the first evaluation of the oil discovery since the 1960s, and was inspired by the significant price hike of oil and electricity over the decades.
Meanwhile, President Noynoy Aquino, through Presidential Communications Operations Office (PCOO) Secretary Herminio B. Coloma, congratulated Gas2Grid and hopes that it will provide additional jobs for Filipinos. However, Coloma emphasized that DOE will ensure that the environment will be protected.
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