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DOE downplays effect of expected Cadlao oil field output on PH energy needs

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Warren de Guzman, ABS-CBN News

<p>MANILA - The Department of Energy said the public should not expect the drilling of the Cadlao oil field off north Palawan to have a significant effect on local oil prices. </p><p>Energy Undersecretary Alessandro Sales said the Philippines&#x27; current demand for petroleum is at 325,000 barrels per day, while Cadlao is only expected to produce 5,000 to 15,000 barrels per day by 2024. </p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/10/11/22/govt-revives-nido-petroleums-oil-drilling-in-palawan">Marcos says DOE approved Nido Petroleum&#x27;s oil drilling in Palawan</a></li></ul><p>Sales also said it will take time for the Cadlao field to move from drilling to actual oil production.</p><p>“Realistically speaking, we are talking in Cadlao, we expect the well to be drilled in the first half (of 2023). The extended production testing could run up to a maximum of 6 months,&quot; Sales said. </p><p>The production facilities can be installed by 2024 and production can proceed from that period, he said. </p><p>However, Energy Secretary Raphael Lotilla said they are hoping the success of Cadlao, and the foreign drilling and exploring partner Nido Petroleum, will help convince more foreigners to develop other prospective oil fields in the Philippines</p><p>“It is just one, first step because this is not of course going to make a massive impact on the supply requirements of oil in the Philippines. But if this is going to be sustained, then we are going to see further development of other service contracts in the country,&quot; Lotilla said. </p><p>The DOE says Nido Petroleum’s drilling activities at Cadlao alone will cost $72 million for two wells and the extended production testing. That is about P4.2 billion based on the latest exchange rates, a cost the Philippine government cannot afford to shoulder on its own due to the high levels of debt and tight fiscal space created by COVID-19 pandemic spending. </p><p>Lotilla said ensuring all Philippine government agencies deliver on promises of ease of doing business during this time will help encourage more investors to come and help explore more prospective oil fields. </p><p>Cadlao is covered by Service Contract 6B. Lotilla did not share specifics on which other Service Contracts may be developed after Cadlao, </p><div><strong>Security and Environment</strong></div><p>The DOE also assured members of the media that Cadlao is situated well within Philippine territories, so security will not be an issue. </p><p>They also stressed that the Department of Environment and Natural Resources and the Palawan Sustainable Development Council will carefully monitor the drilling activities to ensure any damage done to natural resources of the area is minimized.</p><div><strong>Coal and BOC</strong></div><p>Meanwhile, the DOE said it has also been working with the Bureau of Customs to ensure the public is not disadvantaged by volatilities in global coal prices, which have surged this year due to several factors including the effects of the Russia-Ukraine war.</p><p>Energy Undersecretary Sharon Garin said they found that the BOC has been using a reference value for coal that was actually higher than the transactional value. </p><p>Garin however clarified that this will have no immediate impact on power costs, and only seeks to ensure any costs passed on to consumers reflect the true cost of imported coal.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/news/09/05/22/padilla-seeks-revival-of-joint-oil-exploration-talks-with-china">Padilla seeks revival of joint oil exploration talks with China</a></li>	<li><a href="https://news.abs-cbn.com/business/08/28/22/china-eyes-resuming-oil-gas-exploration-talks-with-ph">Chinese minister says hopes to resume joint oil, gas exploration talks with PH</a></li></ul><div><strong>RELATED VIDEO</strong></div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=2220077" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><div> </div>

DOE said the Philippines' current demand for petroleum is at 325,000 barrels per day, while Cadlao is only expected to produce 5,000 to 15,000 barrels per day.

DOE downplays effect of expected Cadlao oil field output on PH energy needs

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DOE downplays effect of expected Cadlao oil field output on PH energy needs

Warren de Guzman,

ABS-CBN News

Published Oct 12, 2022 04:08 PM PHT

Read More:

oil exploration

oil drilling

Cadlao oil field

Nido Petroleum

DOE

Popo Lotilla

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