Philippines hopeful of discovering onshore oil

An Australian company will soon begin drilling for oil on the Philippine island of Cebu, hoping to tap what may be a huge source of undiscovered wealth for the archipelago, Manila said Monday.

Sydney-based Gas2Grid Ltd. will drill two wells in Carcar City and one in the coastal town of Aloguinsan within three months, Energy Undersecretary Jose Layug said.

The company is "bullish" about the prospect of success which could eventually yield as much as 69 million barrels of oil and 50 billion cubic feet (1.5 billion cubic metres) of gas, he added.

All of the Philippines successful oil operations so far have been in deep waters.


"If oil will be discovered, it will be a game-changer, especially for Cebu," Layug added.

He said it would earn Cebu huge amounts of revenue while helping to lower the country's large oil imports.

However he declined to give details until any oil deposits are confirmed.

The development of onshore oil wells is much cheaper and faster than the offshore wells that require
drilling in deep water, Layug said.

"But it can be more challenging because there are local communities who can complain," he said, adding that the government and oil company would have to explain the benefits while minimising the effects of oil production.

Cebu is known for its tourism industry, built around its many beaches, its export industries and as a trading centre for the central Philippines rather than for any mineral resources.

The Philippines produces 6,000 barrels of oil per day from its offshore oil wells but consumes 300,000 barrels per day, he said.

Layug said the country was "underexplored" as far as oil prospects were concerned and could yield more discoveries.

Source: MSN.Com

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