MANILA, June 10 (Reuters) - The Philippines, which is tryingto...

MANILA, June 10 (Reuters) - The Philippines, which is trying
to cut dependence on imported oil, said on Tuesday that its
17,500 barrel-per-day (bdp) Galoc oilfield will come onstream
next week with output aimed at local refineries.
"We are pleased to announce that the development of Galoc oil
field is completed and that the first flow of oil is estimated to
be commencing June 16, 2008," Energy Secretary Angelo Reyes told
reporters.
The Philippines' newest oil field holds deep significance,
not only for the Philippines whose meagre output it will hike by
some 70 percent to slightly more than 40,000 bpd, but also for
Otto Energy and Nido Petroleum , two small
indepependent Australian companies.
Otto Energy acquired a 31.38 percent stake in Galoc
Production Co (GPC) last December, with European trader Vitol
holding the remaining 68.62 percent.
GPC operates the Galoc field with a 58.29 percent interest.
The remaining 41.71 percent is split between Nido Petroleum, with
a 22.28 percent share, and several Phillipine partners.
Galoc comes as a relief for the Philippines, which is trying
to cut its annual import bill of $6 billion and is reeling from
soaring fuel and food costs which have pushed annual domestic
inflation to record highs.
Galoc will also be Otto's Energy's first oilfield to come
onstream.
"The Philippines will earn from the sales of crude oil which
will be benchmarked at international prices and with domestic
refineries being given the first priority," Reyes said. "Rather
than be exported, it will be consumed locally."
Reyes said this would translate to $1.4 billion in foreign
exchange savings for the country from the start of commercial
production until the life of the well expires.
Galoc is said to contain 10 million to 20 million barrels of
oil reserves, Reyes said.
"It must be mentioned that the oil we have in Galoc field is
high-quality oil, it is light, non-waxy and it is medium content
in sulphur," Reyes said. "It is premium oil and could be refined
in local refineries here."
The new crude will provide the first major crude oil addition
to the Asia-Pacific region.
The Philippines also wants to develop its Malampaya oil
reserves -- estimated at 7 to 8 million barrels per day.
The Malampaya gas field off the coast of Palawan island in
western Philippines, which supplies natural gas to three large
plants, is the country's largest hydrocarbon discovery, supplying
all of its natural gas.
Another big name that has taken a stake in the country's oil
and gas exploration sector is Exxon Mobil Corp , Reyes
said.
Exxon Mobil has taken a 50 percent participating interest in
an existing service contract, held by Mitra Energy Ltd, a
Malaysian exploration and production company.
The service contract covers 860,000 hectares of Philippine
territory in the Sulu Sea.
(Reporting by Karen Lema; editing by Ben Tan)
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Keywords: PHILIPPINES OIL/GALOC