Galoc oil field’s first crude cargo seen by Nov

MANILA, Philippines - Production of as much as 20,000 barrels per day will be established in the Galoc oil field in Palawan by next month, Australian-based oil and gas explorer Otto Energy Limited Monday said. In a disclosure to the Australian Stock Exchange Monday, Otto Energy expressed optimism that the first crude oil cargo from Galoc would be seen by November after Galoc overall performance has been "consistent with expectations" since the field has been in production starting Oct. 9. "While the well test data is still being analysed, overall performance is consistent with expectations and a steady state production of 18,000- 20,000 barrels a day is anticipated within the next few days. The first cargo of crude oil from Galoc Field is scheduled during the first week of November 2008," Otto’s statement said. "We are extremely pleased with the initial production results achieved at Galoc over the last two weeks. Galoc Production Co. as the field operator has done a fantastic job, and we have also been very pleased with the reliability of the service facilities." Otto Energy chief executive Alex Parks said. Otto Energy holds a 31.38% stake in Galoc Production Co. (GPC), which in turn holds a 58.29% working interest in the firm's oil field. This gives Otto Energy an 18.28% indirect interest in the field. The Galoc reservoir is some 2,200 meters below the sea floor and which lies some 60 kilometers off the island of Palawan. It was discovered in 1981 with further appraisal undertaken in 1988. The reserves estimate in Galoc is approximately 10 million barrels of oil based on an assessment in 2006. Presently production is from the first well with the second well due to come on-line shortly. GPC earlier said given current reserves and production rate estimates, the current development is expected to last between 3 to 5 years. Oil has previously flown from the Galoc Field during the 1980’s, this was undertaken to assist in establishing the volume of oil that could be commercially produced. The production test produced 380,000 barrels of crude but the field was not developed at that time due to the combination of risk associated with the reservoir, low oil price and available technology. Galoc is seen as a relief for the Philippines, which is trying to cut its annual import bill of $6 billion and is reeling from soaring fuel and food costs that have pushed inflation to record highs. It is also targeted to cut the country’s dependence on imported oil as the country consumes about 300,000 barrels per day. — Ava Kashima K. Austria, BusinessWorld