Written By Real Kevin Jay on Thursday, January 9, 2014 | 4:56 PM
Gas2Grid Ltd. of Australia announced the approval by the Energy Department of its application to declare the Malolos-1 oil well on the shore ofCebu as an "oil discovery."
“The company advises that the Philippine Department of Energy has formally recognized Malolos-1 as an oil discovery and approved an extension of SC [Service Contract] 44 in order to conduct oil production with the aim of establishing a commercial oil field,” Gas2Grid said in an announcement.
SC 44, issued in 2004, covers 750 square kilometers in central Cebu. Gas2Grid said the one-year extension of the contract would start Jan. 28. The company said it planned to conduct a longer period of oil production testing to establish the commerciality of SC 44 starting February, subject to equipment availability.
The testing is estimated to cost up to $1 million. The recent oil test set the production rates at 100 to 200 barrels per day.
“We consider that the longer- term testing will also enable an independent expert to certify and convert some of the contingent resource of oil in place into proven, probable and possible oil reserves,”