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Exxon eyes oil search; Galoc to supply 10% fuel demand

By Sherwin C. Olaes

06/11/2008

Oil giant Exxon Mobil plans to look for oil and gas in the Philippines, Energy Secretary Angelo Reyes said.

Reyes said officials of the Texas-based oil company are scheduled to call on President Arroyo in Malacanang this week.

“Exxon Mobil, which is the largest oil and gas explorer, developer and producer in the world, will make a courtesy call on the President. And they have expressed their interest in exploring for oil and gas in the country,” Reyes said.

He said Exxon Mobil is interested in Service Contract 56 currently held by Mitra Energy Limited, a Malaysian exploration company.

Exxon Mobil has recently acquired 50 percent ownership of Service Contract No. 56 and the right to operate the oil and gas exploration project in Sulu.

Reyes explained that Exxon Mobil’s entry into the exploration of oil and gas in the country would be “very significant” as the world’s leading oil and gas exploration firm would not be interested in establishing its presence here unless it is convinced that large-scale oil or gas reserves can be found in the country.

“To us this is very significant, because this will signal that the probability of large and quality oil being found in the Philippine is now extremely high,” Reyes said. Exxon Mobil earned more than $40 billion last year.

Reyes added the Galoc oil field is expected to start flowing oil on June 16, and that its output will be enough to fill 10 percent of the country’s fuel needs.

“We are pleased to announce that development of Galoc oil field is completed and the first flow of oil is estimated to be within or will commence on June 16. This will be first time oil field development since 1992 will occur,” Reyes told reporters.

“Philippines will earn from the sale of oil to be benchmarked internationally and the foreign exchange savings will be around $1.4 billion,” he added.

Reyes said oil exploration firms expect oil from Galoc to have a high quality that can be refined locally.

The oil field has an investment worth $120 million where oil companies such as Otto Energy, Nido Petroleum and European trader Vitol hold interests in the oilfield’s operation.