Philippines: Galoc Joint Venture Approves FEED for Phase II Field Development

The Galoc Production Company (“GPC”), operator of the Galoc oil field offshore Palawan in the Philippines, advises that the Galoc Joint Venture has approved the commencement of Front End Engineering and Design (FEED) in support of the planned Phase II development of the field and the acquisition of new 3D seismic.

The Galoc oil field commenced production in October 2008 and recently produced its eight millionth barrel of oil, delivering its 23rd cargo. The Galoc Joint Venture supports planning for a Phase II development of the field, notionally drilling  between 1 and 3 additional wells targeting 3 million to 10 million barrels of additional reserves.

Front End Engineering and Design

The Galoc Joint Venture has approved the commencement of FEED work to determine the exact locations and number of additional wells to be drilled, with drilling likely to take place in 2013.

Galoc field performance continues to reinforce the Joint Venture’s confidence in the field reserves with current production being approximately 6,700 barrels per day.

The conversion of the FPSO Rubicon Intrepid to install a bow mounted turret mooring system is a crucial component of infrastructure to enable the Galoc Joint Venture to move ahead with the Phase II development.

The scope of FEED work, to be undertaken prior to a Final Investment Decision, includes subsurface modeling of the reservoir, drilling and completion design, subsea engineering and tie-back design for the new wells and joint venture  financing considerations.

The work will be primarily undertaken in Perth with support from the Manila-based GPC personnel.

 Acquisition of 3D Seismic

In addition to FEED work, the Galoc Joint Venture has approved the acquisition of 184 km2  of new 3D seismic covering the Galoc field and adjacent Galoc North exploration prospect. The seismic will be acquired in October 2011, subject to  relevant approvals being received, and the resulting inversion and interpretation will be completed by mid-Q2 2012.

The new 3D seismic will support the placement of Phase II wells in the reservoir and de-risk this major capital expenditure. In addition, it will also mature the Galoc North exploration prospect, which may be included as part of Phase II or a further phase of development at the field.

The Joint Venture has undertaken a market survey to determine suitable vessels to acquire the 3D seismic and is currently finalizing contracting to secure a vessel.

Targeting Project Sanction mid-2012

The final project approval, Final Investment Decision (“FID”), for the Galoc Phase II development is targeted for mid-2012. The Galoc Joint Venture will consider pre-investment in required infrastructure, including wellheads, flowlines and umbilical lines during the FEED stage.

Operations Update

The Galoc Joint Venture recently approved an upgrade of the mooring and riser system to install a more conventional bow-mounted turret mooring system for the FPSO Rubicon Intrepid.

This conversion is planned to commence in the fourth quarter of 2011. It is planned to undertake two more cargo deliveries prior to the FPSO departing the field for the conversion.

This upgraded system is expected to substantially increase the FPSO operating uptime to in excess of 95% due to the enhanced and simplified single point mooring system.

General Information 

The Galoc oil field is located in Service Contract SC14C (Galoc Sub Block) in 290m of water approximately 65km north west of Palawan in the Republic of the Philippines.

The original development of Galoc involved the construction of two subsea completed horizontal production wells giving extended reservoir contacts, tied back to a Floating Production Storage and Offloading (“FPSO”) facility via a short seabed pipeline and mid-water riser system.

Most likely oil reserves estimated at time of commitment to the development in 2006, were approximately 10 million barrels. The estimated ultimate recovery has recently been increased following successful results from the initial two and a  half years of production and now stands at approximately 15 million barrels (at the 2P level).

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Source:GPC ,September 5, 2011;