Arroyo gave the go-ahead last week for the project, carried out by a Chinese Co.
By Rexcel Sorza, IOL Correspondent
ILOILO CITY, Philippines, December 16 (IslamOnline.net) – In a move expected to boost the economy and investment chances in the southern Philippine island of Mindanao, a new oil exploration project has been launched, according to the Mindanao Business Council.
Romeo Serra, MBC vice chair, said the oil exploration project approved early this month by the government would benefit Mindanao not only with the investment but its impact on foreign investors.
“Such a big investment is definitely good for Mindanao. It would help our economy with the money that would be put into it,” Serra told IslamOnline.net Thursday, December 16. He pointed out, too, that “it would tell the world that Mindanao is a safe place for investors.”
Philippine President Gloria Arroyo allowed last week the oil exploration project over the Agusan-Davao basin in Mindanao’s Davao province.
South Sea Petroleum Holdings Ltd., which has similar projects in Indonesia, is going to spend US$200,000 for the initial stage of the project that includes the conduct of geophysical survey.
The Chinese-owned firm registered with the Hong Kong stock exchange is going to spend another US$700,000 for the first exploration well. It plans to drill three to four wells each to determine commercial viability of the petroleum reserves.
In announcing the project’s approval, Philippine Energy Secretary Vincent Perez said that any discovery of oil in the area “will be a big boost to our economy and energy independence.” Philippines is largely dependent on oil imported from the Middle East.
Mindanao is rich in natural resources.
Serra, speaking for the MBC, the largest organization of businessmen in Mindanao, told IOL that Mindanao’s economy is thirsty for foreign investors.
“We really need investors here particularly foreign investors because we lack capital. With our island’s potential, there is so much you could put your money into.”
He added the oil exploration project “is a concrete example” that Mindanao, the country’s second largest island and touted to be home to the vast untapped natural resources, is a good and safe place to invest in.
The MBC official pointed out that peace is an important factor that ushered in the new investment. “It is good that the cease-fire between the MILF [Moro Islamic Liberation Front] and the government is holding true. Investors have now started to look at Mindanao again.”
Mindanao, home to most of the country’s Muslim population, has been hugged by conflict for the last three decades, shooing away potential investments by big foreign companies. The MILF, which is fighting to reclaim the island, is in an armed conflict with the Philippine government.
An ongoing exploration project for oil is undertaken in Mindanao’s Sulu Sea. Initial drilling with total depths of 1,850 feet and 935 feet for each oil well show the two contain about 260 million barrels of oil and another 600 billion cubic feet of gas.
The Sulu Sea, on Mindanao’s southern tip, is one of the most prospective areas for oil and gas exploration based on the results of the Philippine Petroleum Resource Assessment Project conducted by the Norwegian Agency for Development Corp. The study showed that the area has the same geology with the oil and gas producing fields in Indonesia, Malaysia and Brunei.
The Philippines is reputed to have 2.8 trillion cubic feet of proven natural gas reserves.
According to the Mindanao Economic Development Council’s recent report, “there is an observed improvement in business climate as indicated by the continued pouring in of investments in Mindanao along with increased air and sea traffic.”
It pointed out that peace and order conditions “particularly in the conflict-affected areas of Mindanao most especially with the resumption of the peace talks and the visit of the International Monitoring Team from Malaysia are envisioned to further boost business confidence and sustain economic activities in Mindanao.”