Sarangani Petroil’s exploration sites are located at the southernmost tip of the island of Mindanao, Philippines and one of the two natural harbors in the country: the other which is Subic Bay in Luzon which was once utilized as an American military base. The sites lies proximate to two of the world’s biggest trenches. Mountain ranges surrounding these areas are basically limestone and shale and littered with fossilized corals and other marine species visible on mountainsides. After the volcanic eruption centuries ago these mountains were covered with pyroplastic materials which over time became its topsoil. Photogeology shows that these mountains range drips down to the bottom of the bay.
Along the shorelines of the bay are numerous gas seepages, some of which are already used and covered with soils by locals for fear of gas explosion and fire. Gas at Site 1 has been used for cooking since some 16 years already. Another at Site 2 when discovered shoots a fire to as high as 8 feet indicating extreme pressure underneath.
Rock sampling from onshore Site 5 discovered by an American-trained Filipino geophysicist (now deceased) yielded .35% oil. Subsequent analysis rock sample also confirmed the presence of oil.
For years, the untapped potential of these areas in the southern part of the Philippines has remained largely unexplored amidst the government’s focus on regions such as Palawan, Sulu and Tawi-tawi, and certain parts of Luzon and Visayas during the Philippine Energy Contracting Round (PECR).
While the majority of the areas offered for exploration are concentrated in Palawan, Visayas, and select parts of Luzon, the government has been unable to include SPC’s areas due to the lack of available data. This absence of data presents a unique advantage for the company, as the legal requirement necessitates the nomination of the sites for inclusion in the upcoming PECR round.
Once nominated, it will be included in the areas for offer during the next PECR. We are of the opinion that since there is no available data, no other group can bid. However, in the most unlikely situation where another group will bid for the sites and win in the bidding, SPC being the nominator has the right to match the winner’s winning bid.