Service Contract 14C (Galoc Field) is located 60km northwest off Palawan Island, offshore of the Republic of the Philippines. Matahio Energy holds a 79% operating interest via its wholly owned local entity NPG, alongside domestic partners.

Galoc has been in production since 2008 and recently passed 24 MMstb recovered. The field produces 1,500bopd (Gross) via four subsea wells tied back to a Floating Production, Storage and Offloading (FPSO) vessel “Intrepid Balanghai”, which is also owned by Matahio. Since taking over as Operator in late 2018, the Matahio team have halved the asset’s operating costs. Consequently, the field is now expected to produce into the late 2020’s.

The FPSO and subsea facilities are managed by THREE60 Energy under a Life-of-Field Operations and Maintenance contract, supported by NPG’s operations team in Manila and technical experts in Singapore and Kuala Lumpur.

Matahio Energy are the 100% owner of the FPSO Intrepid Balanghai, a a Panama-flagged vessel with IMO 8009569 and classified by the American Bureau of Shipping (ABS).  Key technical specifications include:

• Overall length                         234 m
• Dead weight                           65,320 MT
• Production capacity:
  • Total liquids                25,000 bpd
  • Produced water          15,000 bpd
  • Gas handling              40 MMscf/d
• Crude Storage                        432,823 bbl
• Mooring                                   9-leg turret
• Risers                                      6 slots (currently 2 spare)
• Helideck                                  Super Puma

The vessel is currently located at the SC14C Galoc Field, offshore Palawan in the Republic of the Philippines.  The vessel is operated in partnership with THREE60 Energy as Operations and Maintenance contractor.  Matahio are actively seeking re-deployment opportunities for the FPSO, with a particular focus on Philippines opportunities.

Offshore Philippines – innovative cost restructuring leads to a 50% reduction in lifting costs

Matahio’s management team has successfully operated an offshore Philippines field since late 2018. At this time, the field has been producing for ten years and had entered late life. Through the process of operatorship transition, the team was able to target several operational cost optimizations and contract enhancements, resulting in a 20% reduction in OPEX in the first year. 

However, the 2020 oil price challenge prompted the need for a fundamental – and sustainable – change in the operating model in addition to short-term – but ultimately unsustainable – cost savings. The Matahio Management Team undertook the following structural changes to the asset’s cost structure:

1. Take control of critical infrastructure. 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 GHG emissions.
2. Form innovative alliance with technical partner. A strategic partnership was established with THREE60 Energy for the operation and maintenance of the FPSO. The nature of this partnership drives long term cost optimization in line with declining production rates and / or oil fluctuations, balanced with ensuring asset integrity and reliability.
3. Align with critical service providers. 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.
   

The above has, collectively, significantly lowered lifting costs by >50% and has introduced several further levers to lower these even further in the event the oil price reduces substantially (as it did in 2020). Ultimately, the economic field life now has the potential to be extended well beyond current service contract expiry.

The company also maintained a strong working relationship with the Philippines Department of Energy, receiving constant support to maximize the field’s potential.

Unlocking GHG reduction initiatives through a commitment to energy transition partnerships.

Matahio’s ethos has been decarbonising from within its operations as the first step to reducing its overall carbon footprint. This is the primary mechanism by which Matahio contributes to the energy transition agenda as a responsible and sustainable oil and gas producer.

This energy transition work has been integrated into a companywide ESG plan.

By identifying and maturing decarbonisation opportunities, Matahio has unlocked several greenhouse gas (GHG) reduction initiatives by forming and leveraging meaningful partnerships with varied objectives.

1. Technical problem solving through collaboration:In the Philippines, a technical working group consisting of Matahio, an O&M provider and niche Engineering specialists have together found a potential solution to reduce the carbon intensity of Matahio’s FPSO flare stream by retrofitting a small-scale condensate recovery unit, fabricated from existing materials and equipment. Currently, in the FEED stage, this project targets a sustainable reduction of the asset’s carbon footprint of 20% and complements other ongoing studies to find further deep decarbonisation opportunities.
2. Consolidating an Industry-wide voice: In New Zealand, the Matahio management team has worked in partnership with Energy Resources Aotearoa (“ERA”, the Industry Body for NZ’s Energy sector) on a range of energy transition initiatives as part of ensuring the oil and gas industry has a “seat at the table” alongside government, industry peers and innovators in shaping NZ’s energy transition strategy. This work was kicked off via the public issuance of an energy transition position paper, “Fuelling the energy transition”, and the formation of an Industry Accord, which formalises commitments to GHG reduction. This is considered a world first. As part of this, Matahio’s COO is part of an ERA committee looking to inform New Zealand’s regulatory framework for Carbon Capture & Storage (CCS).  At this year’s Energy Council APAC assembly in Singapore, ERA and Matahio will together-present their energy transition work and demonstrate to the wider investment community that smaller oil and gas players have an important role to play in navigating the trade-offs between emissions reduction, energy security and transition; a subject that is particularly important in NZ.

3. Building innovative partnerships: Finally, Matahio has conducted a screening exercise for emerging technologies in the emissions reduction space. As a result of this work, Matahio NZ has initiated a more targeted study in collaboration with New Zealand’s National Institute of Water & Atmospheric Research (NIWA) to explore novel approaches for CCUS (Carbon capture, utilisation and storage). Whilst CCS remains challenging for smaller operations, such novel solutions as those being studied are hoped to identify pathways to achieving the desired impact in emissions and managing other waste streams.