Deputy managing director Joanne Williams today said Nido was “very pleased” with the progress of the Galoc development.

“All of the formal project approvals for the project have been received, the major equipment contracts are now in place and several significant milestones have been achieved during 2006,” Williams said.

“Nido continues to work closely with the operator and the development drilling is expected to commence in third quarter 2007, with first oil production scheduled approximately four months later.”

Some of the project milestones achieved throughout 2006 included awarding the well engineering, procurement and construction contract to Advanced Well Technologies and approval of the Phase 1 development plan and receipt of the Environmental Compliance Certificate by the Philippine Government.

Nido said another achievement included leading oil and gas certifiers Gaffney, Cline and Associates in Singapore estimating a possible 41.9 million barrels of oil at the Galoc oil field.

The joint venture also awarded a contract for the drill ship Energy Searcher, procured subsea trees and completed a development area seabed survey.

The year also saw Vitol award the floating, production, storage and offtake contract to Rubicon Offshore for the Rubicon Intrepid tanker and its conversion. Nido said the Galoc JV is currently negotiating a sublease agreement with Vitol for this FPSO.

The company said operator Galoc Production has advised that it expects to award the contract for installation of subsea equipment and the mooring and riser systems in late first quarter 2007. It is also finalising procurement of long-lead items such as casing and tubulars.

Nido said the subsea trees are now en route to the refurbishment base and refurbishment of the subsea trees will begin early 2007, prior to their delivery to the field. Prefabrication work has also started on the process equipment.

Development drilling at the Galoc field is expected to start in June next year, with first oil planned for November 2007.

Galoc is in Block C of Service Contract 14 in the NW Palawan Basin. It is about 55km northeast of Shell’s Malampaya gas field and 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 385,000bbl of oil during an extended production test in 1988.