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Service Contract No. 6A (SC 6A) – Octon

Exploration efforts in the license area continued through most of Q1 2021.  The Reservoir Characterization/ Quantitative Interpretation Study in the North Block was completed in February 2021 indicating potential targets for exploratory drilling. 
A program for 2022 to finish the last outstanding piece of technical work to identify a drilling location and prepare a drilling program and budget was prepared by Philodrill for the approval of the joint venture partners.  With the withdrawal of ACE Enexor (formerly Transasia) from the SC on the 27th of January and with the impending expiration of the SC’s 50-year term on February 2024, the joint venture partners opted to surrender the contract and apply for a new Service Contract over the same area by nomination under the DOE’s Philippines Conventional Energy Contracting Program (PCECP).  This has had several precedents and will allow the Joint Venture to reconstitute and have sufficient time to drill and develop any future discoveries in the area.


Service Contract No. 6B (SC 6B) - Cadlao/Bonita

Manta Oil withdrew as contractor and operator of the Service Contract in December.
As a result of Manta’s withdrawal, the relinquished participating interest reverts pro-rata to the remaining participants in the Service Contract and the operatorship to Philodrill. The Joint Venture agreed to designate Nido as the technical operator with the mandate to prepare and implement a program for the Cadlao Oil Field Redevelopment for the drilling and extended well tests of one or possibly two appraisal/exploration wells in the latter part of 2022.
Nido subsequently submitted a farm-in proposal to the Joint Venture to increase its Participating Interest in the Service Contract from 9.090% to 72.7270% and take over the operatorship of the Service Contract.  Under the fam-in, Nido will fund 100% of the drilling, extended well test, and subsequent development of the Cadlao Oil Field in return for the additional 63.637% Participating Interest.

Service Contract 14C1 (SC 14C1) - Galoc

The Galoc Field maintained a reliable production with 99% uptime throughout 2021.  The average daily production rate in 2021 was at 1,727 BOPD resulting in a year-end total of 629,964 barrels. Three offtakes with a total cargo of 632,056 bbls were delivered.  Stable production was received from the G3, G5, and G6.  The G3 well, which has been on cyclic production since January 2019, was continuously managed and contributed at a monthly average of 50 to 100 BPD to the field’s total production output.  The G4 well remained offline since January 2019.
The N2 gas injection operations on the G4 well, to induce well flow by gas lift assistance, started on the 29th of September and was completed by the 4th of October 2021.  The gas lifting of G4 was technically successful and the bull heading allowed access to some oil-bearing strata.  However, the ensuing production from the well was dominated by the influx, both before and after bull heading, from what is believed to be a water-saturated reservoir layer.  It was determined that the G4 well will not flow without continuous gas lift, and even when it flows the water-cut will remain very high.
The 2022 OPEX Budget of USD 23.5 MM was submitted to the Department of Energy in October.  was approved by the Joint Venture. The total offtake volume forecasted for 2022 is circa 480,000 barrels of oil.


Service Contract No. 14C-2 (West Linapacan)

The Sale Purchase and Farmin Agreements between the joint venture and Desert Rose Petroleum Limited (DRPL) were terminated on July 1, 2021, due to Desert Rose’s inability to proceed with the Deed of Assignment process.
A two-phased technical evaluation of West Linapacan B was undertaken during the last quarter of the year.  Phase I was carried out to constrain the uncertainties surrounding the West Linapacan B reservoir properties to determine a probabilistic range of resources. The Phase II of the study involves formulating an appraisal/conceptual development strategy and economic analysis of resource and development scenarios.


Service Contract No. 53 (Onshore Mindoro)

The Motion for Reconsideration on the termination of the Service Contract was approved by the DOE on January 11, 2021.  The Motion for Reconsideration was filed by, Philodrill, Anglo, and Basic after the Department of Energy terminated the Service Contract together with Mindoro Palawan Oil and Gas Inc. as operator and contractor due to failure to comply with the reportorial requirements under the Service Contract.
Basic subsequently withdrew its participation in the Service Contract resulting to further realignment of the Participating Interests of Philodrill and Anglo.
The Service Contract remains to be under a Force Majeure situation. A work program to clear the regulatory issues, including the acquisition of the Certificate of Pre-condition (CP) from the National Commission of Indigenous Peoples (NCIP) Regional Office and the potential conduct of an Information Education and Communication Campaign (IEC) with the relevant stakeholders will be undertaken.  The completion of these programs will depend on how the continuing restrictions imposed by the Covid-19 situation develop.
The Joint Venture’s efforts remain focused on appraising the Progreso Gas discovery for a gas-to-power development project.


Service Contract No. 74 (Linapacan Area)

PXP, the operator of the Service Contract, completed the seismic interpretation of key horizons in mapping out possible stratigraphic play components within the Linapacan A and B structures in March.  The seismic interpretation incorporated the seismic inversion volumes produce in the IKON Quantitative Interpretation study.  Apart from the Linapacan A and Linapacan B prospects, several other leads were identified from seismic.
The biostratigraphic and geochemical analyses of the rock samples collected from the Calamian Island Fieldwork were also completed during the year.  The study was a continuation of the pilot study on 12 outcrop samples in 2019. 
A formal request to the DOE for another regular Force Majeure over SC 74 was requested in May.  Specifically, PXP requested for a 12-month Force Majeure, beginning April 13, 2021, in light of the COVID-19 pandemic hampering the accomplishment of their work commitments.  The request was eventually approved by the DOE on 29 October 2021, effectively extending the current sub-phase, Sub-Phase (SP) 3 of the SC to September 13, 2022.



Galoc Production Area Floating Production and Storage Vessel


Service Contract Areas

  • SC6B - Bonita Block
  • SC14C1 - Galoc
  • SC14C2 - West Linapacan
  • SC74 - Linapacan
  • SC53 - Onshore Mindoro

For more information on these blocks, go to News / Updates Section of this website

For participating interests of these service contracts, please click here.