Matahio Energy has secured a new service contract, SC 88, to continue operating the producing Galoc oil field offshore Palawan Island, Philippines, holding an 80% operated interest. This follows the expiration of the previous 50-year contract, SC 14, which reached its constitutional limit.

Background and Field History

The Galoc field, which came on stream in 2008, has produced at least 25 million barrels of oil. It is exploited via the Intrepid Balanghai floating production, storage and offloading (FPSO) vessel, which has a storage capacity of 480,000 barrels. The previous SC 14 contract, awarded in 1975, covered Galoc and other fields and delivered over 65 million barrels of oil in five decades. However, legislation prevented its extension despite Galoc's ongoing production.

New Regulatory Model and Contract

To address this, the Philippines Department of Energy introduced a new Development & Production Petroleum Service Contract (DP PSC) model. SC 88, the first such contract, was awarded to a Matahio subsidiary and its partners to prevent Galoc reserves from being stranded and to allow safe production to continue seamlessly under the current operator.

Future Opportunities and Partnerships

Matahio has a life-of-field partnership with Three60 Energy to manage the FPSO's long-term integrity for a sustainable field life extension. The operator sees substantial future commercial opportunities for the vessel, particularly in unlocking stranded assets in the Philippines or Southeast Asia. Matahio has also identified other nearby prospects that could be tied back to the FPSO. Its partners in SC 88 are domestic players Philodrill and Forum Energy.