|
FURTHER
delays in the development and production of the
Camago-Malampaya Oil Leg (CMOL) reduce the prospects the
country could benefit from it in view of high world oil
prices, an oil industry expert told BusinessMirror.
“While
oil prices are still high and assuming there are
qualified and willing developers, the government should
come out with the new bidding rules for the development
of the CMOL at the soonest,” Rufino B. Bomasang,
chairman of NorAsian Energy Ltd. said in a phone
interview.
The
former Philippine National Oil Co.-Exploration Corp. (PNOC-EC)
president said that further delay only means continuing
reduction of pressure—that in turn means higher
extraction costs, amid uncertain oil prices.
“This
combination can make the CMOL project unviable in the
future,” Bomasang said.
Whatever
technology is used or will be used, according to
Bomasang, it remains a fact that the earlier oil is
produced, the more oil can be extracted. “Otherwise, if
we are to just depend on technology, then we might just
as well leave the oil on the ground and wait for future
technological advancements,” he added.
Bomasang
pointed out that the main advantage of extracting the
oil now, if there is someone willing and qualified to do
so, is that oil prices are high. “Future oil prices may
not be high enough to make the extraction of the CMOL
viable,” he added.
Based on
PNOC’s estimates, a year of delay results in a
diminution of anywhere from seven to eight million
barrels a year in ultimate recovery.
Energy
Secretary Raphael P.M. Lotilla earlier said PNOC-EC has
yet to finalize the bidding terms and conditions for the
development of the CMOL.
“PNOC-EC
is still evaluating the terms and conditions under which
the development of the CMOL project will be bid out.
Assessments are still being conducted, particularly on
whether the oil found underneath will still be
available,” Lotilla said.
“They [PNOC-EC]
are seriously evaluating and studying every prospect of
developing the CMOL, considering that there have been
new technological developments in recovering the oil,”
he added.
Lotilla
said the window period has yet to lapse in view of the
technological developments in terms of oil and gas
exploration and extraction activities.
“PNOC-EC
is quite confident about these technologies. However,
there are still issues being threshed out, particularly
on the indemnity, insurance on some of the technical
requirements,” said Lotilla.
The
energy chief added that PNOC-EC is trying to determine
if it will impose prequalification requirements on the
companies that can and will participate in the bidding;
and what will be the minimum technical and financial
terms and conditions.
“PNOC-EC
is evaluating the necessity of these factors as these
might unintentionally and unnecessarily narrow down its
choices,” Lotilla said.
The
development of the CMOL has been in the backburner since
the government issued controversial Executive Order 556
in August last year, which revoked a “virtual contract”
between PNOC and the Malaysian Mitra Energy Ltd. to
extract the oil from the CMOL. The order stated that
“there shall be no farm-in or farm-out contracts awarded
by any government agency, including PNOC, including
contract for the exploration, development and production
of crude oil from the Camago-Malampaya reservoir.”
PNOC was
supposed to partner with Mitra to undertake the
development of the CMOL project—involving the drilling
and extraction of about 25 million to 40 million barrels
in estimated oil reserves underneath the Malampaya
natural gas resource. |
