The Vitol Group today announces the sale of its 68.62% interest in the Galoc Production Company WLL (GPC), operator of the Galoc oil field, to its co-shareholder Otto Energy Limited for a total consideration of US$54 million.
GPC was set up as a Vitol subsidiary in 2005 to hold a 58.29% participating interest in the Galoc Sub-Block of Service Contract 14C, located offshore North West Palawan, Philippines. GPC assumed operatorship of the sub-block at the time of the farm-in and successfully brought the Galoc field on stream in October 2008, just 23 months after the project was sanctioned.
Despite the success of the project, Vitol has decided to divest its interest in GPC following a strategic review in early 2011 because the Galoc field is no longer regarded as a core asset for Vitol.
Chris Joly, Vitol’s Upstream Manager , commenting on the agreement with Otto said:
“As GPC’s major shareholder, Vitol was instrumental in bringing this marginal oil field into production and we are proud of what we have achieved in the challenging environment of the South China Sea in such a short time frame. However we have concluded that Galoc is no longer a core asset for us as we sharpen our focus on the exploitation of our growing undeveloped resource portfolio in West Africa.
With continuing excellent support from the Government of the Philippines and the Galoc joint venture, and with the enhancements now planned to Rubicon Offshore International’s “Intrepid” FPSO, Otto are well positioned to unlock considerably more value from Galoc for the benefit of all the stakeholders. We wish all concerned every success.”
[mappress] Source: Vitol, August 12, 2011;