Philippines Oil And Gas Profile

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Introduction
As of June 2011, the potential petroleum resources of the Philippines totalled to 27,905 million of oil initially in place and 53,870 billion cubic feet of gas in place. The estimated recoverable discovered and undiscovered resources include 1,892 million barrels of oil, 10,349 billion cubic feet of gas and 164 million barrels of condensate. These petroleum reserves calculations are based on the sixteen sedimentary basins situated all over the country from the Cagayan Valley Basin in the north down to the Agusan-Davao Basin in the south as well as the prolific Northwest Palawan Basin and the Sulu Sea Basin along the western flank of the archipelago. These basins extend on both offshore and onshore areas. The offshore regions comprise both shallow to deepwater areas for exploration.

History
1949 - The Petroleum Act is passed 1989 - Relatively large fields were discovered in the deep waters off Palawan when Occidental Petroleum tested gas in its Camago Structure. 1990 - Alcorn Philippines discovered the West Linapacan Field and commenced production two years later 1990 - Shell discovered Malampaya Gas Field becoming, by far, the largest gas discovery in the country. 1994 - The Philippine National Oil Company developed and produced the San Antonio Gas Field in Onshore in northern Luzon

Regulation
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. Under Presidential Decree (P.D.) 87 otherwise known as the " Oil Exploration and Development Act of 1972, the following incentives are provided for petroleum service contractors: o Service fee of up to 40% of net production o Cost reimbursement of up to 70% gross production with carry-forward of unrecovered costs

o o o o o o o o o

FPIA grants of up to 7.5% of the gross proceeds for service contract with minimum Filipino company participation of 15% Exemption from all taxes except income tax Income tax obligation paid out of government's share Exemption from all taxes and duties for importation of materials and equipment for petroleum operations Easy repatriation of investments and profits Free market determination of crude oil prices, i.e., prices realized in a transaction between independent persons dealing at arms-length Special income tax of 8% of gross Philippine income for subcontractors Special income tax of 15% of Philippine income for foreign employees of service contractors and subcontractors

Upstream
As of June 2011, the potential petroleum resources of the Philippines totalled to 27,905 million of oil initially in place and 53,870 billion cubic feet of gas in place. The estimated recoverable discovered and undiscovered resources include 1,892 million barrels of oil, 10,349 billion cubic feet of gas and 164 million barrels of condensate. These petroleum reserves calculations are based on the sixteen sedimentary basins situated all over the country from the Cagayan Valley Basin in the north down to the Agusan-Davao Basin in the south as well as the prolific Northwest Palawan Basin and the Sulu Sea Basin along the western flank of the archipelago. These basins extend on both offshore and onshore areas. The offshore regions comprise both shallow to deepwater areas for exploration. The Malampaya Natural Gas Field is the single most important field providing gas to major local power staions

Active Companies
Philippine National Oil Company (PNOC) serves as the key institution in the exploration development and utilization of indigenous energy sources.

Midstream
There are plans to invest heavily in natural gas infrastructure The Batangas Manila Gas Pipeline is designed to supply gas to the capital

LNG
The Philippines Government has plans to retrofit power stations to convert them to use natural gas. To support this LNG terminals need to be constructed The Philippines is located between major LNG suppliers and consumers, and advantageous position for investment in LNG There are currently two companies considering building LNG import terminals PNOC is studying the feasibility of the Limay Lng Terminal Interoil has the Pagbilao Grande Island Lng Terminal project

Downstream
The Philippines downstream oil industry had been deregulated since 1998 and is currently dominated by two (2) major oil refining and marketing companies; Petron and Pilipinas Shell. A third oil refiner and marketer, Caltex Philippines Inc. converted its 86,500 bbl/d Batangas Refinery into an import terminal in 2003 and now operates as a plain marketing and distributing company under the name Chevron, but maintains its Caltex brand. Philippine National Oil Company (PNOC), a state-owned company, and Saudi Aramco jointly own Petron; each with a 40 percent stake while the public holds the remaining 20 percent share. Petron operates the 180,000 bbl/d Limay Refinery and over 1,200 gasoline stations nationwide; Pilipinas Shell has the 110,000 bbl/d Tabangao Refinery and about 800 gasoline stations Caltex/Chevron has 2 import terminals, and around 850 retail gas stations nationwide. Caltex built the first petroleum refinery in 1954. Followed by Stanvac in 1960, with the construction of what is now the biggest oil refinery in the country the Bataan Refining Corporation. Shell Refinery started operations in July 1962 while a local player, Filoil Refinery, began operations in September 1962. Currently there are 3,472 registered gasoline dispensing stations ,182 LPG refilling plants, 28.30 MB of storage capacity and 16.62 MMB depots (import and export terminals). A 135 km white-oil and 100 km black-oil pipelines are used to transport oil from the refineries in Batangas to Manila and vice versa.

Bataan Limay Refinery

Summary Information
Ownership: Petron Website: http://www.petron.com/ Location: Limay, Bataan, Philippines Capacity: 9 million tons/annum & 180,000 bbl/day Nelson Complexity:

Refining Units
CDU VDU Isomerization Unit 10,000 bbl/day CCR Platformer - UOP - 17,000 bbl/day Gasoil Hydrotreater Fluidized Catalytic Cracker 19,000 bbl/day Penex unit - UOP - 10,000 bbl/day Propylene Recovery Unit

Terminal Capacity
Crude Oil: Refined Products:

Products Produced
LPG, gasoline, diesel, jet fuel, kerosene, industrial fuel oil, solvents, asphalts, and the petrochemical feedstocks-mixed xylene and propylene.

Tabangao Refinery
Summary Information
Ownership: Shell Website: http://www.shell.com o List of Shell Refineries Location: Batangas near Manila, The Phillippines Capacity: 5.5 million tons/annum & 110,000 bbl/day Nelson Complexity: Refining Depth:

Brief Description
A medium sized simple refinery

Refining Units
Atmospheric Distillation Platformer Diesel Hydrotreater

Terminal Capacity
Crude Oil: Refined Products:

Products Produced
LPG, Gasoline, Diesel, Bitumen

Ongoing Projects
Shell had planned to expand the refinery, but the project was shelved in 2007 Shell plans to build an LNG terminal at the refinery

History
1960 - Shell began building its first crude refinery in Tabangao, Batangas 1962 - Operations commenced 1995 - A bigger and more modern refinery was commissioned, adjacent to the existing facility in Tabangao

Limay Lng Terminal

Summary Information
Ownership: PNOC Website: http://www.pnoc-ec.com.ph/ Location: Bataan, Limay, Philippines Capacity: million tons/annum Status: Planned

Brief Description
A Floating Storage and Regassification Unit (FSRU)

Technical Details
Storage capacity: Unloading capacity: Send out capacity: Constructor: Licensor:

Ongoing Projects/Project Status

San Miguel is conducting a study to determine the viability of putting up an LNG tank farm in Limay

Suppliers / Customers
Suppliers: Customers: o The main customer was to be the Limay combined cycle power plant in Bataan o Gas will be supplied to a variety of customers via the Bataan Manila Gas Pipeline

History
2010 - PNOC EC takes ownership of the project 2011 - San Miguel Disposed of Limay Power Plant and is no longer interested in this project