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Oil!

Finding oil within your country’s boundaries is like winning the geological lottery – and that’s apparently what happened off Palawan: OIL!

Angelo Reyes, in a news conference in Malacañang, said … the $ 120-million oil field in Palawan operated by Galoc Production Co. is expected to produce 17,000 to 20,000 barrels of oil per day, thereby boosting domestic oil supply. Together with current production, the country will be producing over 30,000 barrels of oil per day, Reyes said, almost 10 percent of local demand.

“We are pleased to announce that the development of Galoc Oil Field is completed and that the first flow of oil is estimated to be commencing on June 16, 2008. This will be the first time oil field development in Philippines since 1992 will occur,” he said.

“The Philippines will earn from the sales of crude oil, which will be benchmarked at international prices and with domestic refineries being given the first priority so rather than being exported, it will be consumed locally,” he added.

Reyes said foreign exchange savings from Galoc oil field will reach around $ 1.4 billion or P61 billion during the life of the well and until full extraction of the proven reserves. “Current oil reserves are from 10 million to 20 million barrels but additional exploration work will be done to confirm additional reserves,” he said.

Reyes said if sold in the country, the oil coming from Galoc oil field will be cheaper than the imported petroleum due to reduced costs from insurance and transportation, among others.

Whoa. Will someone please explain to me why this news isn’t making bigger waves than it is? I mean, I understand the morbid fascination with kidnappings and massacres, but isn’t the start of oil production in Philippine territorial waters something to write about?

Whoever is running the department of public morale (if there isn’t such a department, then there damned well ought to be!) should totally capitalize on this. If it were me (HAH!), I’d organize tourist trips to see the oil rig; study trips that’ll take kids out to the well and give them a first hand look at how those things work; i’d set up a promo scheme that’ll funnel consumers to those companies that sell petrol and petroleum products produced from locally sourced oil. Haha. I think I’m oil drunk!

Too bad I’m prolly gonna wake up tomorrow to find some shmuck saying there’s nothing to get excited about, or that the whole deal should be called off because someone thinks that GMA will benefit from this somehow.

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Filed under: environment, news, , ,

19 Responses

  1. Rom, it’s nothing to be excited about.

  2. Rom says:

    Chuck: why not?

  3. J says:

    Indonesia could be a reason why this is nothing to be excited about.

    But I prefer to believe that we are better than the Indonesians. So yes, this news makes me excited.

  4. Jeg says:

    I’ll be more excited if they use whatever revenue they generate from that finite resource to fund our local universities doing research on alternative and sustainable sources of energy, something that, say, the farmers can afford to put up. But if, as usual, this just ends up making a handful of people rich, then ho-hum. 😉

  5. cvj says:

    Rom (at 10:39 am), because just like in the case of food, the primary problem has to do with the price of oil, not its supply. In turn, price is a problem because of poverty and inequality. An additional 20k barrels per day is not enough to make a dent on the price so the hardship continues. Even if we were self-sufficient in oil, or even if we exported, the problem will be there as long as the structure of our society does not change. Take it from Venezuela which has been a major oil exporter but the gains only went to a small segment of the population until Hugo Chavez came along to try to fix things so far with mixed results.

  6. rom says:

    cvj: admittedly, we’re not gonna be swimming in dollars anytime soon. And yes, 20 thousand barrels a day isn’t much more than a drop in the bucket. but at least we have something now that we didn’t have before.

    where we go from there is another story, of course. Now we can all be pessimistic and say that nothing is gonna change anyway; or we can be optimistic and believe that we have a better chance at changing things now than we did before.

  7. cvj says:

    At 20K barrels per day, that means the field will be producing oil for three years, with a foreign exchange savings of 500 Million USD per year. Ok, it’s enough to pay for one NBN-ZTE deal or one year worth of rice imports, or invest in infrastructure to automate the next elections. Admittedly not something to sneeze at.

  8. rom says:

    cvj: 😀

  9. Bencard says:

    “the primary problem had to do with the price of oil, not its supply.” cvj

    are you brushing aside the law of supply and demand (last i heard, it’s not been abolished yet). if the 20,000 barrels a day were used exclusively for domestic consumption, would it not significantly increase the supply, enough to surpass the demand locally? what would then happen to the price?

  10. Bencard, what i meant by that statement is that it’s not the availability of oil that is the problem but the price at which it can be procured. We consume around 350K barrels per day so 20K barrels per day is not enough to surpass domestic consumption:

    http://www.eia.doe.gov/emeu/cabs/Philippines/Profile.html

  11. Bencard says:

    it sounds like a no brainer but 350k plus 20 equals 370k, more than what is required for local consumption, right? the point is any amount produced locally either reduces importation or increases the local supply and lowers the price for the consumers.

  12. cvj says:

    Bencard, the 350K is the amount consumed so the equation is more like 350K minus 20K equals 330K that still needs to be imported to meet local consumption requirements.

  13. Bencard says:

    cvj, the problem is we’re looking at the same animal from different angles. wouldn’t we be spending less if we import 330k as opposed to 350k? the difference would be passed on to the consumers by lowering the pump price by that amount. the same result if we continue importing the same 350k and then add the 20k produced at home thereby modestly ‘flooding’ the market, so to speak.

    sorry, rom, for wasting your blog space with this roundabout argumentation.

  14. cvj says:

    bencard, ok now i see what you mean.

  15. rom says:

    bencard: no worries, uncle. you’re all welcome here! 😀

  16. Jen says:

    hi rom,

    just dropping by to say hi 🙂

  17. rom says:

    jen! OMFG, welcome to the smoking room!!! You have no idea how happy I am that you’re here! JEN!!! JENIJENJEN!!! 😀

  18. Jen says:

    i lurk here everytime i go online haha…
    you have no idea how such a huge fan i am lol…seriously, i love your work 😀

  19. rom says:

    And you’re one of the coolest chicks I know! 😀

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