Galoc oil field to suspend operation

The consortium operating the Galoc oil field, the country’s largest oil-producing field, is suspending production in September.

Operator Galoc Production Co. (GPC) has set the cessation of operation (COP) for Galoc on Sept. 24, Oriental Petroleum and Minerals Corp. (OPMC) and The Philodrill Corp. said in separate disclosures to the Philippine Stock Exchange yesterday.

The COP follows the issuance of the termination notice from the floating production storage and offloading (FPSO) service provider, Rubicon Offshore International. “The matter has been relayed to the (Department of Energy) and is seeking

From B1 approval of the initial drawdown on the Abandonment Fund for the implementation of the Suspension Plan,” OPMC and The Philodrill said.

Despite the suspension,

GPC and its partners are still eyeing to restart oil production once the oil market environment improves.

“GPC has relayed its total commitment to the long-term future of the Galoc asset and is currently evaluating several scenarios to retain flexibility for the earliest possible production re-start as and when the market conditions improve,” OPMC and The Philodrill said.

OPMC said the coronavirus disease 2019 or COVID-19 pandemic and the recent oil price war has greatly impacted on the demand and price of oil.

“There is a drastic decline in international oil price. Current trading price is below $35 per barrel, which is already 50 percent below the start of this year,” it said earlier.

OPMC said the consortium had been exhausting all means to bring down its operating cost to mitigate the impact of the weakening oil prices.

OPMC and The Philodrill are minority partners in Service Contract (SC) 14C Galoc oil field with 7.78505 percent working interest each.

The Galoc oil field is one of the 22 active petroleum service contracts in the Philippines.

Last year, the Galoc oil field accounted for 96 percent of total production of the country, making it the country’s largest oil resource.