The rig contract involves drilling two development wells, with an option for a third, using the Energy Searcher, a drillship managed by Jet Drilling, which is expected to arrive onsite next June. Subsea trees have also been secured for refurbishment and use in the development.

Nido Philippines president Bryce Martin said the Energy Searcher would be the first offshore rig in the Northwest Palawan Basin in six years and heralds a revival in the Philippine oil industry.

“Execution of these contracts is a major milestone for the Galoc project,” he said.

“These are the first significant contracts to be placed following the approval of the plan of development by the Philippine Department of Energy.”

Nido deputy managing director Joanne Williams said the development of the Galoc oil field was the largest single investment in the junior’s history.

“We are extremely fortunate to secure this rig and subsea trees in such a tight market for oil field services,” she said.

“It is a tremendous credit to the planning capability and effort of the operator [Galoc Production] over the past six months.”

She said Galoc – the first turbidite development in the NW Palawan Basin – was key to Nido’s growth strategy in the Philippines.

“The expected production in the first year of 1.4 million barrels will provide strong cash flow to sustain the exploration of the company’s world-class acreage position,” Williams added.

The Galoc field, in which Nido holds a 22.279% interest, is situated in Block C of Service Contract 14 (“SC 14”) in the NW Palawan Basin, offshore Philippines. It is about 70km west of Culion Island in around 290m of water.

Two exploration and appraisal wells were drilled in the Galoc field during the 1980s and produced more than 385,000 barrels of oil during an extended production test in 1988.

The first development phase will involve connecting two subsea horizontal wells via a seabed flowline and riser system to a Floating, Production, Storage and Offtake Facility (FPSO).

With first oil planned for the fourth quarter of next year, Nido said it expects each productive horizontal wells will initially produce up to15,000 barrels per day.

To maximise oil recovery, Nido said total field production rate would most likely be limited to an initial production plateau of about 17,500bopd for 12-24 months.

“Field data gathered during drilling and the initial production will represent an important appraisal activity, which will lead to a better understanding of the field and the upside reserves potential,” Williams said.

“The development design has the flexibility to tieback additional wells to the FPSO in the event of a substantial increase in estimated recoverable volumes.”

Galoc will be the first offshore field to be developed since the nearby Malampaya gas development in 1998 and at 17,500bopd will represent approximately 7.5% of national oil imports and a doubling of the country’s current oil production.