Petroleum is vital to many industries, and is of importance to the

maintenance of industrial civilization in its current configuration, and thus is

a critical concern for many nations. Oil accounts for a large percentage of the
worlds energy consumption, ranging from a low of 32% for Europe and Asia,
to a high of 53% for the Middle East.
Petroleum Exploration History
Petroleum exploration in the Philippines dates back to 1896 with the drilling
of Toledo-1 well in Cebu Island by Smith & Bell. Widespread exploration
activities were carried out from the 1950s to 1970s. At that time, exploration
was governed by Republic Act No. 387 known as the "Petroleum Act of 1949"
which ushered in the era of the concession system.
The current Service Contract System took effect in 1973 with the enactment
of Presidential Decree No. 87, better known as the "Oil Exploration and
Development Act of 1972". With its attractive contractual terms and liberal
fiscal regime that are particularly favourable to offshore exploration,
activities shifted to offshore areas like the Northwest Palawan Shelf where
the first oilfield, Nido, was discovered. Several small fields, all located in
offshore Northwest Palawan, were subsequently discovered and produced.
In 1989, relatively large fields were discovered in the deep waters off
Palawan when Occidental Petroleum tested gas in its Camago Structure.
Alcorn Philippines, in 1990, discovered the West Linapacan Field and
commenced production two years later until 1996. Also in 1990, Shell
discovered Malampaya gas field becoming, by far, the largest gas discovery
in the country. The field started to produce commercially in 2002, providing
clean fuel for power generation to Luzon grid. At present, Malampaya natural
gas provides about 40% of Luzons power requirement.
Onshore in northern Luzon, the Philippine National Oil Company developed
and produced the San Antonio Gas Field in 1994 and supplied natural gas as
fuel to the local electric cooperative in the Province of Isabela.