Shell Extends Malampaya Gas Field

Shell Philippines Exploration announced that the extended well test of the thin oil rim beneath the Malampaya gas field initially yielded about 8,000 barrels of oil per day (bpd) on December 2, 2001. This production figure is considered to be the highest oil production rate per well in the country since the 1970's.

The extended oil well test performed on Malampaya by the Atwood Falcon drilling rig and Stena Natalita floating storage unit is also believed to be the deepest horizontal subsea well test undertaken in the world at a depth of about 850 meters below the sea level, thereby adding to the number of world records achieved by the Malampaya team.

DOE Secretary Vincent S. Perez, who visited the drilling rig in Palawan on December 1 with SPEX Managing Director David J. Greer said, "We are very happy to hear that after almost 30 years we may have found a potentially commercial oil field. This is especially significant because we are trying to wean ourselves from the use of imported energy sources. The use of indigenous sources of fuel particularly Malampaya natural gas will make us 52% self sufficient in energy. If we include the use of local oil following this discovery, our self sufficiency in energy will further increase."

Greer said, "The relatively light crude oil of approximately 30 degrees API commenced flowing from the subsea oil well earlier on December 2 and is currently being processed on board the Atwood Falcon before being exported to the dynamically-positioned Stena Natalita oil tanker for temporary storage. The current flow rate of the oil to the tanker will be constrained initially to about +/- 8,000 bpd until we have completed our initial well clean-up and monitoring program. The well build-up program will be finalized over the next couple of days once we have had a chance to evaluate the results of our initial monitoring program. The results of this important test coupled with the outcome of ongoing discussions with partners and government will eventually determine whether subsequent long-term commercial production may be feasible."