SINGAPORE - The Philippines has made the first oil exports from its new Galoc field, originally aimed for use by domestic refineries, to capitalize on better prices of sour crude in regional markets, officials said on Wednesday.
Galoc, off southwestern Philippines, came on stream in October but was shut down in mid-December for inspection following production problems due to bad weather and production will resume as early as Wednesday, the officials said.
Two 300,000-barrel cargoes of Galoc's crude or Palawan Light, was sold to Thai Oil TOP.BK and South Korea's SK Energy, ahead of the December shutdown, said J.V. Emmanuel de Dios, Chief Executive Officer of Nido Petroleum Ltd, one of field's equity holders.
A similar-sized cargo had been earlier sold to top Philippine refiner Petron.
"Personally, I like more to be sold in the country, but if there is benefit to be sold outside the Philippines in terms of better price, which also benefit the government, that should be good," de Dios told Reuters, adding they would not rule out occasional exports whenever there are opportunities.
The cargoes were sold abroad also because of maintenance at Petron's 180,000 barrels per day (bpd) refinery between December to around mid-February, he said on the sidelines of an upstream oil conference.
Field restart soon
Vitol and European trader Trafigura are the two main marketers of Palawan Light, which has a higher sulfur content than most other Asia-Pacific crudes at 1.64 percent.
Sour crude prices have been rising on the back of the ongoing deep OPEC cuts, which led to lower supply of Middle Eastern sour grades.
Alex Parks, Chief Executive Officer of Australia oil firm Otto Energy, another equity holder of the field, said production of the oilfield could resume "within 24 hours".
Production should ramp up quickly to the 13,000-14,000 bpd levels seen before the shutdown, de Dios said.
Galoc Production Company (GPC), in which European trader Vitol has a 68.6 percent stake and Australia's Otto Energy a 31.4 percent interest, is the operator of the field, with a 58.29 percent share.
The remaining 41.71 percent share of the field is split between Nido Petroleum, with 22.28 percent, and several Philippine partners.
Nido also had two successful oil discoveries in Philippines -- Yakal and Tindalo -- in 2008, and is now targeting first oil from these discoveries in 2010, de Dios said.
Nido is confident of weathering the current economic downturn, because it requires no major capital expenditure this year after Galoc started production last year and before the two new productions come onstream next year.
"You see a lot of oil companies cutting down their spending. We have two discoveries, now having the opportunity to actually develop them," de Dios said.
"We have cash, that means we don't necessarily think about that. There is no major capital expenditures in 2009."
Nido and Philippine National Oil Co-Exploration Corp are selling part of the interests in their 50:50 joint venture in an oil and gas exploration project in the Philippines.
BHP Billiton and the Philippine unit of Royal Dutch Shell both want to bid for the stakes, a state official has said.
De Dios declined to say when the interests can be awarded but would not rule out offering operatorship to the new partners.