TACLOBAN CITY—An Australian company will start oil drilling operations in San Isidro town, Leyte, this month.
Otto Energy Ltd., a firm engaged in onshore and offshore oil and gas projects in the Philippines and East Africa, was awarded service contract 51 by the Department of Energy.
The contract area covers the Cebu-Bohol Strait and parts of Leyte where a well called Duhat 2 is located.
According to the company website, geologists have described Northern Leyte as having the most natural oil seeps in the Philippines but is largely unexplored.
The United Nations Environment Program (Unep), in its website, described natural oil seeps as springs where oil and gas, instead of water, leak out of the ground.
Otto Energy said tests last year showed that Leyte, in particular San Isidro town, contains an active petroleum system.
“All the elements exist for a potential major hydrocarbon discovery in Leyte,” the company said.
If drilling in the Duhat 2 well becomes successful, full field development and exploration are expected to start next year.
In February, the Leyte provincial board granted a permit to the company to conduct oil drilling operations, mostly offshore, within an area of more than 332,000 hectares covering several villages in the towns of San Isidro and Calubian.
Allan Ang, Leyte provincial board member and former mayor of San Isidro, said the main site of the oil drilling operations is in Barangay Basud, six kilometers from the town proper.
Ang said the drilling operations would provide employment to at least 100 residents and mean additional income in the form of royalties to San Isidro.
San Isidro is a fourth class town (P52 million annual income) with a population of more than 30,000 in 19 villages. It is 132 km from Tacloban, the regional capital of Eastern Visayas.
The Duhat 2 well is believed to contain at least 88 million barrels of oil.