THE AREA 09 INVESTORS
An oil and gas exploration projects are always a high-risk, capital intensive, high yield and technologically driven venture. Not all giant companies in the world can undertake the oil and gas business. It requires lots of guts, positive spirit and perseverance; expert and experienced individuals; a mountain of scientific data and tons and tons of money. With the advent of computers, satellites and the Global Positioning System (GPS) where geologists and drill engineers could pinpoint the exact location where to drill an exploratory well up to +/- 4 meters (12 feet) to include drill rigs that have cameras at the tip of the boring machine, todays exploration is the wish of legendary and pioneering geological surveyors.
Sixty-two years ago, when the legendary Honorable Jose L. Guerrero was the Mayor of the municipality of Lambayong (Mariano Marcos), in the province of Sultan Kudarat, a team of American geologists working with the Petroleum and Geophysical International Corporation, USA (PGIC); for one year conducted a seismic and gravity survey in the Lambayong area up to Roxas mountain range, in the municipalities of Tantangan and Banga, South Cotabato.
This team was able to publish a Geological Report of Area 09 complete with seismograms and profile sections. Conduct of seismic survey is only the first step in oil and gas exploration. The next step is the interpretation of the submitted scientific data which could last from six months to one year. The firm of a certain D.V. Chipera interpreted the scientific data submitted by PGIC, USA and C.W. Allen of W.M. Cabeen & Associates revised the seismic findings in October 1960. After the interpretation and revision of the seismic data, comes the third step – actual drilling operation. Anglo-Maremco, a Joint Venture (JV) company of Maremco Mineral Corporation and Anglo Philippines Oil Corporation bought the said seismic data in October 1962 and spearheaded the oil and gas exploration in the Cotabato Basin.
From 1962 to 1972, for a ten-year exciting, interesting and frustrating period, Anglo-Maremco drilled several exploratory wells in Barangays Gansing (Bilumin) and Lagao, in Lambayong; in Barangay Bambad, in Isulan and in Barangay Pedtubo, in President Quirino. The drill engineers at that time found out that the hydrocarbon accumulation in Gansing, South Tantangan, North Roxas and Bambad were in the so-called overpressure zones that prevented them to reach the desired depth of 8,000 feet (their oil rig had a 6,000 feet depth capacity only), where the oil and gas deposit were located. However, after penetrating the depth of 3,000 feet, crude oil shot up to 68 feet and natural gas burned continuously. In his Final Report on Gansing 1 and 2 and Bambad1 Wells on November 25, 1964, Chief Geologist Ignacio Antonio, despite the drilling difficulties concluded that the Gansing Prospect remains an attractive prospect. Please see below portion of his 1964 report:
The drilling difficulties experienced by Anglo-Maremco was also encountered by South Seas Oil and Mineral Exploration Development Company, the operator of San Jose Oil the concessionaire of the Tantangan – Banga Prospects. The efforts of these pioneering companies, while they failed to achieve their desired objectives, did come unnoticed by the global oil and gas industry. In 1980, an adventurous team from Texas, hired by Shell, USA arrived in Cotabato City but were prevented to explore the Cotabato Basin. This same group went to Palawan in 1990, forged a Joint Operating Agreement (JOA) with Occidental Petroleum USA to operate the Camago-Malampaya Service Contract (SC) 38 concession and after 8 years found commercial quantity of natural gas in the so-called Malampaya gasfield. The discovered natural gas had a proven quantity of 3.2 TCF and could supply 3,200MW of power for 24 years (would last up to year 2024).
During the late 1980’s up to 1997, the Philippine National Oil Company (PNOC) through its exploration arm PNOC-Exploration Corporation (PNOC-EC) continued the conduct of a series of seismic surveys and drilled three exploratory wells with Malaysia’s Petronas in Sultan sa Barongis, a municipality in Maguindanao but shared common border with Lambayong. However, because of a serious security issues in 1997 which prevented further exploration, the area for 23 years was not visited by an oil and gas company. It was only in January 2020 when a team from our company conducted ocular inspection in the old drill sites. It is actually the legacy of SK Liguasan Oil and Gas Corporation (SKLOGC) to open the Cotabato Basin for exploration and drilling operation after a 23-year hiatus. Although Area 09 is in the peaceful provinces of Sultan Kudarat and South Cotabato, well outside of the Bangsamoro Autonomous Region for Muslim Mindanao (BARMM), the passage of the BARMM law in 2019 established a secured environment conducive to unimpeded oil and gas operation in the region.
The local partners and investors of SKLOGC were found qualified to satisfy the Financial Requirement imposed by the Department of Energy (DOE) during the November 03, 2020 bidding for Area 09 of the Philippine Conventional Energy Contracting Program (PCECP). However, exploring and producing (E&P) crude oil and natural gas are not the main reason why we participated and won the bidding. We intend to accomplish our mission of making Mindanao progressive by extracting the petroleum deposit in the Cotabato basin, construct power plants to distribute affordable and available electricity to the residents and business entities and refine the crude oil to develop a tremendous impact in the energy sector and enable the Philippines to produce its own natural gas, petroleum derivatives, and petro-chemical products without importing from abroad.
We can modestly handle the upstream operation but honestly need foreign partners with their latest technology and investors to accomplish the downstream activities to construct power plants, petro-chemical plants, oil refinery, power lines, transmission towers, sub-stations, oil depots and seaport. This year eight groups from Korea, India, UAE (Dubai), Saudi Arabia, Europe, Malaysia, China and Russia expressed interest as partners. Last August, we signed a Memorandum of Understanding (MOU) with NextMetals, a London-based investment company with past experiences in oil and gas ventures. NextMetals have current multi-billion-dollar projects in South Africa and Batam Island, across Singapore.
Since Area 09 has multi-drilling sites, around twelve in an 110,000 hectares Service Contract area, we need more partners and investors. We have all the scientific and geological data from the DOE that we are willing to share with our investment partners. We believe that together, we handle the local component and our foreign partners provide investment and technology, we could finally produce substantial quantity of natural gas and crude oil in the Philippines.