Late-life assets are often overlooked in the pursuit of a sustainable energy future. The ageing reservoirs of mature oil fields may seem like a symbol of the past, though our experience shows they can be beacons for the future. They are opportunities to take a more progressive approach to energy.
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In 2018, Matahio's management team assumed responsibility for a late-life field 60km off the coast of Palawan Island in the Philippines. The SC14C Galoc Field had been producing for ten years and sorely needed a fresh perspective. Within just the first year, our team reduced operational expenses by 20% — but this was only the beginning.
The 2020 oil crisis marked a new opportunity for change. The Matahio management team undertook the following structural changes to the asset's operating model and cost structure:
The Operator acquired the FPSO and leased it back to the joint venture at a significantly reduced bareboat charter rate. Importantly, Matahio now has direct control of this vital piece of infrastructure, including the freedom to execute brownfield projects, the first of which is targeting a 20% reduction in greenhouse gas emissions.
Matahio works closely with THREE60 Energy for the operation and maintenance of the FPSO. The nature of this partnership drives long-term cost optimisation in line with declining production rates and/or oil fluctuations, balanced with ensuring asset integrity and reliability.
Leveraging strong relationships with local contractors, long term agreements were enhanced to include reduced rates when the oil price is low, but shared upside when the oil price is high.
Through these actions we have halved lifting costs and introduced several further levers to lower these even further in the event the oil price reduces substantially. Ultimately, the economic field life now has the potential to be extended well beyond current service contract expiry.
These developments were only possible through our strong working relationship with the Philippines Department of Energy. As we look to the future, we will continue to receive constant support to maximise the field’s potential.