AN official of the Department of Energy (DOE) on Thursday said gas was discovered in the Mangosteen well in Isabela. But to say that the discovery is commercially viable is speculative at this point in time.
“They are only in the discovery stage. To speculate on its commerciality is way too early, and the DOE can’t comment on that. The only way to determine it is drilling,” Rino Abad, director of DOE-Energy Resource Development Bureau said, in a phone interview.
Recent reports said the gas discovered by PNOC-Exploration Corp. (PNOC-EC) is commercially viable. However, during a drill stem test, PNOC-EC was “unable to flow gas in commercial volumes due to restricted flow of gas,” the DOE said in a statement on Wednesday.
“They were still able to flow and flare gas twice for a short period from the accumulated gas in the separator. The gas that flowed out at this time only confirmed the discovery of gas in the area,” the agency said.
To determine an accurate estimate of gas volume, a stimulation testing should be conducted, the DOE said.
The DOE will verify if a gas discovery is commercially viable or not, said Abad, adding that geologists will apply a scientific measurement to determine if the discovery is commercially viable or not.
“Normally, the computation works by multiplying the volume to the prevailing market price, then deduct possible expenses. But how can you arrive at the volume, if a drilling has yet to take place? To say something that it is already commercially viable is reckless,” he said.
The DOE is set to meet with PNOC-EC on Friday.
PNOC-EC President Pedro Aquino Jr. earlier said they are hoping to find enough gas that could power up to 100 megawatt (MW) of natural-gas power plant.
PNOC-EC has been scouting for partners that maybe interested to take in up to a maximum of 70 percent in Service Contract (SC) 37. Under the same SC,, PNOC-EC used to operate the San Antonio gas field, the country’s first commercial production of natural gas, from 1998 to 2008. However, due to exhaustion of gas reserves, this was permanently shut down. The gas field produced 3.54 billion cubic feet, supplying the 3-MW San Antonio Gas Power Plant, which generated a total of 187,482.12 megawatt-hours of electricity.
Aside from SC37, another SC covers Cagayan Basin. This is SC52, which is operated by Frontier Oil Corp.
Cagayan Basin is one of the 16 sedimentary basins in the country. Based on the Philippine Petroleum Resource Assessment, Vol. 8—Cagayan Basin by the DOE, it has a potential unmapped resource of 1,938 BCF of gas and 26 million barrels (mmbls) of oil. The potential mapped resource, meanwhile, is 123 BCF of gas and 3 mmbls of oil.