DTI: Sacgasco to invest in oil projects

Australian firm Sacgasco, operating as Nido Petroleum in the Philippines, said it is planning to get a drilling rig in early 2023 as it eyes new offshore oil developments in the Philippines, according to the Department of Trade and Industry (DTI).

The DTI said that the Australian firm plans to conduct an extended well test on the revitalization of the old Cadlao Oilfield, which is covered by Service Contract (SC) 6B in the Palawan basin. A successful test would lead to the redevelopment of the Cadlao Oilfield.

This project, the DTI said, will be followed with a plan to drill the “exciting” Nandino Prospect, through SC 54A, also offshore Palawan and to conduct an extended well test as the basis for more to fully developing a discovery at Nandino.

“Sacgasco said the initial investments for the oil projects in SC 6B and SC54A are in the order of $15 million each for the drilling and testing of oil production with a follow-up investment of between $10-50 million for each project,” the Trade department said in a statement on Wednesday.

Sacgasco Managing Director Gary Jeffery said there are “massive” opportunities to develop oil and gas in the Philippine territory. Jeffery said, “our highest desire is to explore frontier areas with large potential near the Malampaya Gas Field that supplies Natural Gas to Manila and surrounding areas.”

The company is also involved in SC 14C2 which includes potential for redevelopment of the West Linapacan Oilfield.

Sacgasco’s managing director noted that the size of the prospects in SC 58 is “such that successful drilling would dramatically change the Philippines’s energy picture for the better.”

“Our vision is well-aligned with the new administration’s goal of increasing the level of energy production in the Philippines as the country’s energy demand far exceeds reliable supply as stated by President Marcos during his SONA [State of the Nation Address].”

Representatives of Sacgasco were initially part of the business delegation to the recently-concluded Pacific Business Mission to the Philippines last August but they had to delay their plans for a few weeks due to the threat of Covid-19, the DTI said.

However, the Philippine Department of Trade and Industry’s overseas trade office in Sydney said it is ready to provide whatever assistance it needs so the company can make it happen in the Philippines.

The Trade department noted that the Philippine government prioritizes the equilibrium price for energy and assures continued support for foreign investments as the Board of Investments, with endorsement from the Department of Energy (DOE), guarantees enhanced incentives focused on energy-related projects to achieve efficiency, cost reduction, ensure continuous supply of petroleum products, and enhance environmental protection.

Meanwhile, according to the Downstream Oil Industry Deregulation Act of 1998, such incentives include additional deduction for labor expenses, minimum tax and duty of 3 percent and value-added tax on imported capital equipment, unrestricted use of consigned equipment, exemption from taxes and duties on imported spare parts, among others.

Jeffrey said they are pushing through with their visit on September 19-24 and will be meeting with their local partners, the DOE and other stakeholders.