Provincial Board grants clearance for energy firm to drill oil in Leyte

By Philippine Information Agency (PIA 8)
February 8, 2013

TACLOBAN CITY – The Provincial Board of Leyte has granted clearance to NorAsian Energy Ltd. to conduct drilling operations in an area covered by Service Contract 51 issued by the Department of Energy.

Board Member Ryan Lawrence Tiu, chairman of the Sangguniang Panlalawigan’s Environment Committee, informed that the Leyte Provincial Board found no impediment to grant the clearance after going through the reports submitted by the Community Environment and Natural Resources Office and the Committee on Energy.

Board Member Tiu said the company [NorAsian] together with the DoE has complied with the requirements of consultations and consent from all levels of the council as provided for by Sections 26 and 27 of the Local Government Code and Section 21 of the Environmental Code of the Province of Leyte.

“Clearly, NorAsian Energy has endeavored to follow the proper procedures and complied with the necessary legal and documentary requirements. As such, there is no reason why the committee should not grant their request,” Tiu said.

In compliance with the agreement made by the company and the legislative body last year, for it to regularly inform the Body on the update of the export exploration activity in the northwest part of Leyte, NorAsian made a presentation on January 22.

The presentation showed that the 3D seismic survey conducted by NorAsian last year showed that there is sufficient deposit of oil in the area covered by SC 51 in the town of San Isidro, and this has to be verified through a drilling program.

After the presentation, the company requested the august body for a resolution interposing no objection for it to drill the Duhat-2 prospect in mid-2013.

NorAsian, a unit of Australian firm Otto Energy Ltd., has been contracted by the Department of Energy (DoE) to explore oil potentials within the 332,000 hectares of land over northwest Leyte embracing 20 barangays mostly covering the town of San Isidro but also includes the towns of Palompon, Tabango and Calubian.

According to Otto Energy, drilling could cost $2.5 million to $3 million. Based on DoE’s projection, NorAsian could extract a minimum of two million to 18 million barrels of oil from the project site.

The island of Leyte which is situated in the eastern Visayan region of the Philippines has been known for more than a century to be the site of numerous fresh natural oil seeps and the Balite tar sands which have been mined in the past for bitumen.

The presence of natural seeps and surface indications of large anticlinal features with the potential for petroleum reservoirs are strong positive indicators of the prospect of a basin largely untested by modern drilling.

According to the DOE, the first and only deep well in the basin, Calubian-1 (2500m), drilled on Leyte, was positioned on surface observations in 1957 and indicated the presence of both oil in side wall cores and Miocene age reservoir sands.

The recently acquired seismic has proven that this well was drilled off structure, an invalid test, and being the only deep well in the region confirms that the potential of the entire region has yet to be effectively tested.