(Photo from Nido Petroleum)

The Philippine government is expected to generate around $72 million (P4 billion) worth of investments as President Bongbong Marcos gives the reopening of the Cadlao oil field in Palawan the “green light,” the Department of Energy (DOE) said, but once opened, its daily production is not enough to meet the country’s oil demand nor lower the price of petroleum products.

In a virtual press briefing on Wednesday, October 12, the energy department’s undersecretary, Alessandro Sales, said that Nido Petroleum, a subsidiary of Australia-listed energy firm Sacgasco Ltd., has committed a total of $72 million for the survey and testing phase of 2 service contracts in the Cadlao oil field.

“Around $16 million per well, as per the budget they submitted. They are undertaking extended production testing, so that’s an additional $40 million… So if you count that, $16 [million] and another $16 [million] and $40 [million], so a total of $72 million for both contracts,” Sales said.

Sales also said that if exploration and testing are “successful,” a “permanent production facility” will be built at the Cadlao oil field by 2024.

Based on the estimates of DOE, the project is expected to produce 15,000 barrels per day at most, as compared to the 320,000 barrels of oil that the Philippines consumes each day.

“In terms of daily production, this could come out to a high of 15,000 barrels to a low of 5,000 barrels, and these fields will normally decline in time. In terms of actual impact on fluid consumption, the Philippines consumes about 320,000 barrels per day of fuel,” Sales said.

“It’s really a very small portion. What’s significant are the signals we are sending out to foreign investors. That we are here, the fiscal and regulatory regime are stable… We are looking forward to a renewed interest in the foreign companies to come in and maybe develop bigger resources in our country,” he added.

Energy Secretary Raphael Lotilla admitted that the oil field’s output will hardly have any effect on the supply and prices of oil and petroleum products in the country.

“This is just the first step. This is not 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 the further development of the other service contracts in the country,” Lotilla said.

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