Philippines Case Study Philippines Case Study Sulu Sea and East Sulu Sea and East Palawan Palawan Basins Basins Petroleum Policy & Management (PPM) Project Petroleum Policy & Management (PPM) Project Coordinating Committee for Coordinating Committee for Geoscience Programmes Geoscience Programmes in East and Southeast Asia in East and Southeast Asia (CCOP) (CCOP) Dissemination Seminar Dissemination Seminar Redentor Redentor D. Pascual D. Pascual Department of Energy Department of Energy Petroleum Resources Development Division Petroleum Resources Development Division 12 May 2006 12 May 2006 Manila, Philippines Manila, Philippines OUTLINE OUTLINE PPM Project Team PPM Project Team Sulu Sea Basin Case Study Sulu Sea Basin Case Study Project Activities Project Activities Results of Resource Assessment Results of Resource Assessment Results of Economic Analysis Results of Economic Analysis Field Development Options Field Development Options Resource Management Strategies Resource Management Strategies Licensing Strategies Licensing Strategies Recommendations Recommendations CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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Philippines Case StudyPhilippines Case StudySulu Sea and East Sulu Sea and East PalawanPalawan BasinsBasins
in East and Southeast Asia in East and Southeast Asia (CCOP)(CCOP)
Dissemination SeminarDissemination Seminar
RedentorRedentor D. PascualD. PascualDepartment of EnergyDepartment of Energy
Petroleum Resources Development DivisionPetroleum Resources Development Division12 May 200612 May 2006
Manila, PhilippinesManila, Philippines
OUTLINEOUTLINE
PPM Project TeamPPM Project TeamSulu Sea Basin Case StudySulu Sea Basin Case StudyProject ActivitiesProject ActivitiesResults of Resource AssessmentResults of Resource AssessmentResults of Economic AnalysisResults of Economic AnalysisField Development OptionsField Development OptionsResource Management StrategiesResource Management StrategiesLicensing StrategiesLicensing StrategiesRecommendationsRecommendations
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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Philippine Case Study TeamPhilippine Case Study Team
National ProjectNational ProjectCoordination Coordination CommitteeCommitteeRamon Allan V. Ramon Allan V. OcaOcaIsmaelIsmael U. U. OcampoOcampo
National CoordinatorsNational CoordinatorsGuillermo H. Guillermo H. AnsayAnsayRedentorRedentor D. PascualD. Pascual
Technical TeamTechnical TeamArlene Y. A. Arlene Y. A. MagbanuaMagbanuaEdmundoEdmundo B. B. GuazonGuazonRolando Z. MoralesRolando Z. MoralesJed B. Jed B. AragonesAragonesNeil O. Neil O. PesaPesaAndres O. Andres O. PangilinanPangilinanDemujinDemujin F. F. AntipordaAntipordaIsabel A. B. NicolasIsabel A. B. Nicolas
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
PPM Project Duration: July 2002 to July 2006PPM Project Duration: July 2002 to July 2006
Sulu Sea Basin Case StudySulu Sea Basin Case Study
BORNEO
SULU SEA
PANAY
MIN
DA
NA
O
1000m200m
1000m
20
0m
1000m
200m
1000m200m
REED BANK
PALAWAN
Section Line
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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Sulu Sea Basin Case StudySulu Sea Basin Case Study
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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WORKSHOPSWORKSHOPSWorkshop / Workshop /
DateDate TOPICTOPIC
11stst WS / WS / 13 13 –– 18 Mar 200318 Mar 2003
Introduction of the PPM Project, General Overview Introduction of the PPM Project, General Overview of the Case Study Basin, Upstream Petroleum of the Case Study Basin, Upstream Petroleum Activities in the Philippines, and Resource Activities in the Philippines, and Resource Assessment Activities by the DOEAssessment Activities by the DOE
22ndnd WS / WS / 22 22 –– 27 Jan 200427 Jan 2004
Petroleum Prospect & Play AnalysisPetroleum Prospect & Play Analysis
33rdrd WS / WS / 25 25 –– 30 Aug 30 Aug
20042004
Petroleum Exploration Economics and Economic Petroleum Exploration Economics and Economic ModellingModelling
44thth WS / WS / 14 14 –– 19 Mar 200519 Mar 2005
Development and Production SolutionsDevelopment and Production Solutions
55thth WS / WS / 14 14 –– 18 Mar 200618 Mar 2006
Exploration Strategies & Attracting Investments for Exploration Strategies & Attracting Investments for Exploration in the Frontier BasinExploration in the Frontier Basin
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
1st WS 1st WS –– March 13March 13--18, 200318, 2003 2nd WS 2nd WS –– January 22January 22--27, 200427, 2004
3rd WS 3rd WS –– August 25August 25--30, 200430, 2004 4th WS 4th WS –– March 14March 14--19, 200519, 2005
5th WS 5th WS –– March 14March 14--18, 200618, 2006
Petroleum Economics and FullPetroleum Economics and Full--cycle Economic Evaluationcycle Economic Evaluation
Dr. AlfredDr. Alfred KjemperudKjemperud –– The The Bridge Group, NorwayBridge Group, Norway
1414--15 Sep 15 Sep 20032003
Application of Organic Application of Organic Geochemistry to Source Rock Geochemistry to Source Rock Appraisal & Hydrocarbon Appraisal & Hydrocarbon CharacteristicsCharacteristics
Sequence Sequence StratigraphicStratigraphic AnalysisAnalysis Mr. Robert WongMr. Robert Wong Hin FattHin Fatt & & Mr.Mr. OthmanOthman AliAli MahmudMahmud ––PETRONAS, MalaysiaPETRONAS, Malaysia
24 Nov 200524 Nov 2005 Natural Gas Management Natural Gas Management –– the the role of the Governmentrole of the Government
Dr. AllenDr. Allen BeaslyBeasly –– ASCOPE ASCOPE Gas CenterGas Center
77--10 Feb 10 Feb 20062006
Petroleum Reservoir Petroleum Reservoir Management Management –– the role of the the role of the GovernmentGovernment
Mr. JanMr. Jan BygdevollBygdevoll ––Norwegian Petroleum Norwegian Petroleum DirectorateDirectorate
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
1st EV – May 21-23, 2003 2nd EV – September 14-15, 2004
3rd EV – January 17-21, 2005 4th EV – November 24, 2005
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Economic AnalysisEconomic Analysis
Economic Indicators:Economic Indicators:Net Present Value (NPV)Net Present Value (NPV)Internal Rate of Return (IRR)Internal Rate of Return (IRR)Payback or PayoutPayback or PayoutExpected Monetary Value (EMV) or Expected Monetary Value (EMV) or Expected Value (EV)Expected Value (EV)
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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Economic AnalysisEconomic Analysis
Sulu Sea Basin East PalawanBasin
SS6 Prospect
SS2 Prospect
SS6 & SS2 Prospects EP1 Prospect
Resources 1,733 BCF 1,310 BCF 3,043 BCF 1,719 BCF
ProductionPeriod 21 years 21 years 21 years 21 years
NPV @ 12% $1,234 MM $731 MM $2,050 MM $1,218 MM
IRR 26% 20% 27% 26%
Payback 5 years 7 years 5 years 5 years
TGT $7,837 MM $5,962 MM $12,523 MM $7,776 MM
Parameters
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Field Development OptionsField Development OptionsDevelopment and Management SchemeDevelopment and Management Scheme
Reservoir Reservoir Development PlanDevelopment Plan
OILOIL•• solutionsolution--gas drivegas drive
•• gas or water injection gas or water injection
GASGAS•• reinjectionreinjection
•• compressioncompression
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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Field Development OptionsField Development Options
CGS WHP FSU
OGP
Process & Field FacilitiesProcess & Field Facilities
PipelinesPipelines
Balabac Island
Tawi-tawiIslands
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Field Development OptionsField Development Options
Source: BHP Billiton (2004)
Deepwater Oil DiscoveryDeepwater Oil Discovery Deepwater Gas DiscoveryDeepwater Gas DiscoverySource: Minerals Management System
Source: Malampaya Oil Rim
Oil and Gas Discovery & ProductionOil and Gas Discovery & Production
Source: Minerals Management System
Shallower DiscoveriesShallower Discoveries
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Field Development OptionsField Development Options
Palawan
Sabah
BalabacIsland
Tawi-tawi
Sulu
MindanaoCagayan de Tawi-tawi
Basilan
Onshore Gas Plant (OGP))
Onshore Gas Plant
(OGP))
Concrete Gravity
Structure (CGS)
Area for Development
Pipelines
Floating Production Storage & Off-loading
(FPSO)SULU SEA
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Marketing OptionsMarketing OptionsOil Oil -- locally refined or exportedlocally refined or exportedGas Gas -- for power generation or for transportationfor power generation or for transportationTrans ASEAN Gas PipelineTrans ASEAN Gas Pipeline
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Indian Ocean
Asamera CorridorBlocks fields
Minas / Durioil Fields
MYANMAR
THAILAND
LAOS
Bangkok
CAMBODIA
CHINA
VIETNAM
South China SeaLuzon
TAIWAN
SingaporeBatam
Jakarta
MALAYSIA
BRUNEI
INDONESIA
SABAH
Samarinda
Surabaya
PHILIPPINES
Pacific Ocean
NatunaSea
0 250Km
500
3-4
10 6-8
28SARAWAK
46
Existing or u/c Gas PipelineExisting or u/c Gas Pipeline
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Candidate Oil CompaniesCandidate Oil Companies
Already presentAlready presentBuyers of Philippine DataBuyers of Philippine DataPresent in Present in neighbouring neighbouring countriescountriesPast association with the PhilippinesPast association with the PhilippinesWith interest in similar projects elsewhereWith interest in similar projects elsewhereHave a strategy & portfolio where a Philippine Have a strategy & portfolio where a Philippine project would fit inproject would fit in
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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PromotionPromotionTop 10 questions about entering the Sulu SeaTop 10 questions about entering the Sulu Sea--East East
PalawanPalawan Basins (asked by the Board Members)Basins (asked by the Board Members)
1. The Sulu Sea1. The Sulu Sea-- East East PalawanPalawan Basin, are you @X%&# insane?Basin, are you @X%&# insane?2. What will our shareholders think?2. What will our shareholders think?3. What3. What’’s the potential?s the potential?4. How much will it cost?4. How much will it cost?5. What are the lease terms?5. What are the lease terms?6. Who6. Who’’s going to work it?s going to work it?7. Can you get the data, cheaply?7. Can you get the data, cheaply?8. We are not going to operate are we?8. We are not going to operate are we?9. You will get partner and sell down, right?9. You will get partner and sell down, right?10. Is it easy to deal with the DOE?10. Is it easy to deal with the DOE?
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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RecommendationsRecommendationsChanges in the Fiscal System (?)Changes in the Fiscal System (?)-- decrease in minimum acreagedecrease in minimum acreage-- increase in % of FPIAincrease in % of FPIA
Exploration RiskExploration Risk-- comprehensive study of frontier basincomprehensive study of frontier basin-- encourage acquisition of new data i.e. multiencourage acquisition of new data i.e. multi--client client surveys due to low amount of existing datasurveys due to low amount of existing data
Access to DataAccess to Data-- liberal access to data by exploration companiesliberal access to data by exploration companies-- decrease cost of datadecrease cost of data
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Digital DataDigital Data-- conversion of existing data into digital formatconversion of existing data into digital format-- easy use and access by companieseasy use and access by companies
Progressive IncentivesProgressive Incentives-- modify signature bonus according to basinmodify signature bonus according to basin’’s s prospectivityprospectivity-- lower % of SC area relinquishmentlower % of SC area relinquishment
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
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CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006
Contracting RoundContracting Round-- foster healthy competition among companiesfoster healthy competition among companies-- conducted at least every 2 yearsconducted at least every 2 years
PNOCPNOC--EC / PETRONAS Joint StudyEC / PETRONAS Joint Study-- to fully evaluate potential of the basinto fully evaluate potential of the basin-- advantage: national oil companies in their respective advantage: national oil companies in their respective countriescountries-- ongoing DANIDA Project in CCOP: made initial steps ongoing DANIDA Project in CCOP: made initial steps but with obvious constraintsbut with obvious constraints
RecommendationsRecommendations
MaramingMaraming SalamatSalamat Po !Po !
CCOP-PPM Project Dissemination Seminar DOE-PRDD 12 May 2006