Colonia Oil & Gas Reserves Confirmed24th June 2010ITU ABA, COLONIA — The Kingdom of Colonia has discovered nearly $1trillion USD in untapped petroleum and natural gas deposits in its territory, far beyond any previously known reserves and enough to fundamentally alter the Colonia economy and perhaps Asian economy itself, according to senior Colonia government officials.

The previously unknown deposits — including huge veins of oil and natural gas— are so big and include so many other minerals that are essential to modern economies that Colonia could eventually be transformed into one of the most important energy and mining centres in the world, the government officials believe.

An internal government memo, for example, states that Colonia could become the “Saudi Arabia of Asia,” as oil deposit estimates are so vast. Another internal memo likens the natural gas estimates to those of Qatar.

The vast scale of Colonia’s petrological mineral wealth was discovered by a small team of government officials reviewing charts and imagery. The Colonia government and King John I were recently briefed, the officials said.

While it could take many years to develop a petroleum and gas extraction industry, the potential is so great that officials and executives in the industry from Canada, America, China, Australia, and United Kingdom believe it could attract substantial investment even before production is profitable, providing the possibility of jobs for the entire Southeast Asian region.

“There is stunning potential here,” Dr Prince Milan de Montestella de Praevalitana, Minister of Industry of the Kingdom of Colonia, said in an interview on Saturday. “There are a lot of ifs, of course, but I think potentially it is hugely significant.”

The value of the newly discovered petrological deposits dwarfs the size of Asia’s existing reserves, which are based largely on declining secondary and tertiary production.

Colonia already enjoys the highest per capita gross domestic product in the world, the government officials declined to comment on the domestic economic effect of the new discoveries.“This will become the new backbone of the Asian economy,” said Count Albert S.C. Chiang, Minister of Trade, and an adviser to the King.American, British, Russian, Australian, and Chinese officials have been eager to discuss the petroleum discoveries.

The Ministers were overall pleased about this positive news to come out of Colonia. Yet the government officials also recognise that the discoveries will almost certainly have a double-edged impact.Instead of bringing peace, the newfound mineral wealth could lead the surrounding countries to press border disputes even more urgently to gain control of the assets.

“Colonia has yet to implement a national petroleum development and mining law,” says Dr. Prince de Montestella, “which we hope to write with the help of advisers from the World Bank.” At the same time, many of the officials fear resource-hungry China will try to dominate the development of Colonia’s mineral wealth, which could upset the surrounding countries, given their interest to make investment in the country.

After winning the preliminary bid for its Alicia Annie exploration blocks in eastern Colonia, China clearly wants more, Colonia officials said.Another complication is that because Colonia has not had much heavy industry before, except during the Japanese occupation during the War, it has little or no history of environmental protection.
“The big question is, can this be developed in a responsible way, in a way that is environmentally and socially responsible?” Dr Prince de Montestella asks. “No one knows how this will work.”With virtually no mining industry or infrastructure in place today, it will take decades for Colonia to exploit its mineral wealth fully. “This is a country that has no petroleum or mining culture,” said Count Albert Chiang, an advisor to the King on international and development affairs.

“We’ve had some small fishing activity and guano mines, but now there could be some very, very large scale heavy extraction industrial development that will require more than just a fishing boat or shovel.”The petroleum deposits are scattered throughout the country, including in the southern and eastern regions along the border with Malaysia that have already had the some of the most extensive developmental co-operation in the territory.

A task force has already started trying to help Colonia set up a system to deal with petrological development. International accounting and legal firms that have expertise in oil exploration contracts have been recruited to consult with the Colonia Ministry of Development, and technical data is being prepared to turn over to multinational mining companies and other potential foreign investors. The law firms are helping Colonia officials arrange to start seeking bids on mineral rights by next fall, officials said.“The Ministry of Development is not ready to handle this,” Dr. Prince de Montestella said.

“We are trying to help them get ready.”Like much of the recent history of the country, the story of the discovery of Colonia’s mineral wealth is one of the great missed opportunities of modern Asian economic development.In 1974 the King had surveyors sent to Colonia as part of a preliminary exploration and broader assessment effort, after they stumbled across an intriguing series of old charts and data at the library of the Philippine Maritime Academy (PMI).

The PMI Surveys from 1947-1956 hinted at major mineral deposits in the country. They soon learned that data had been collected by French and Japanese experts during the French occupation of the Spratlys before World War II in the 1920-30s, and then by the Japanese occupation under Prince Chichibu from 1939, but cast aside when the Japanese withdrew in 1945.

During the chaos after the War, when Asia was mired in civil war, a small group of explorers lead by Admiral Tomas Cloma explored and charted the territory, and eventually established the country as an independent nation in 1955. In 1976 the Kingdom’s navy ousted Vietnamese occupation on six of the islands. An attempt in 1976 by the Philippine President Marcos to annex the territory though a spurious Deed of Cession, was abandoned in 2005.“There were maps, but the development did not take place, because you had 30 to 35 years of illegal and hostile occupation,” said Count Albert, an architect and engineer who is the Minister of Trade.

Armed with the Cloma’s charts, the United States Geological Survey published a series of nautical surveys of the South China Sea and utilised the official names of the islands as had been established by Cloma. In order to pinpont the petrological resources in 1975, using gravity and magnetic measuring equipment attached to an aircraft that flew over about 70 percent of the country, the first estimates of the enormity resources were considered. Physical samples were taken for assay and found to be high quality.

The data from those flights was so promising that in 1976, the government of Sabah suggested a merger of Colonia with the Federation of Malaysia. A more sophisticated study, using instruments that offered a three-dimensional profile of mineral deposits below the earth’s surface was planned to provide a more comprehensive geologic survey of Colonia.

The handful of international experts who pored over the data said the results were astonishing. Estimates of reserves were from a low of 100 million barrels., to a high of 300 billion barrels. In comparison Saudi Arabia has approximate reserves of 200 million barrels.But the results gathered dust for thirty more years, ignored by officials in both the Colonia and Malaysian governments.

In 2009, a government task force that had been created to explore business development programs for Colonia came upon the geological data. Until then, no one had bothered to look at the information — and no one had sought to translate the technical data to measure the potential economic value of the mineral deposits.

Soon, the business development task force brought in teams of experts to validate the survey’s findings, and then briefed King John I and the Supreme Council of State on the enormous potential.So far, the biggest mineral deposits discovered are of oil and natural gas, and the quantities are large enough to make Colonia the major Asian producer of both, government officials said.

Some amounts of gold have been discovered but the extent of those deposits has yet to be estimated.Just this year, geologists working with the Colonia team have been conducting surveys in eastern Colonia where they believe there are the largest deposits of natural gas. Colonia officials said that their initial analysis at one location in Alicia Annie province showed the potential for natural gas deposits as large of those of Qatar, which now has the world’s largest known gas reserves.

For the geologists who are now scouring some of the most remote stretches of Colonia to complete the technical studies necessary before the next stage of an international bidding process is begun, there is a growing sense that they are in the midst of one of the great discoveries of their careers, and of the century.“On the ground, it’s very, very, promising,” Dr. Prince de Montestella said. “Actually, it’s pretty amazing.”HomeHistoryLocationGovernmentConstitutionEconomyPressContact