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Vol. XXII, No. 158
Friday, March 13, 2009 | MANILA, PHILIPPINES

Corporate News


Four exploration firms to drill seven oil wells


AT LEAST four oil exploration companies are expected to drill up to seven oil wells in Luzon and the Visayas this year, ventures that would hopefully cut the country’s dependence on imported oil, the Energy department said yesterday.

Texas-based ExxonMobil, Shell Philippines Exploration B.V. (SPEX), local Aragorn Power and Energy Corp. and Australian Nido Petroleum Ltd. are all scheduled to explore oil in the Visayan, Cagayan and Palawan basins, Sulu Sea, and Northeastern Palawan.

Energy Undersecretary Ramon V. Oca yesterday said the number of oil wells to be drilled this year is the same as last year.

He said ExxonMobil was targeting to drill two oil wells in the Sulu Sea by June or July, while SPEX would be drilling two wells in Northeastern Palawan in the second half.

Mr. Oca added that Aragorn Power seeks to start drilling in the Cagayan Basin by last quarter, while Australian oil and gas explorer Nido Petroleum might drill two wells in the Visayan Basin also towards the fourth quarter.

Last year, ExxonMobil visited Malacañang to express interest in exploring oil in the country. Mr. Oca said the company might spend about $200 million on the two wells.

ExxonMobil earlier noted that once its drilling activities succeed, the development of the site might require "several billions of dollars."

It holds a 50% stake in the service contract area in the deep-water Sandakan Basin. Malaysian exploration firm Mitra Energy Ltd. holds the remaining stake.

ExxonMobil has subsidiaries in nearly 200 countries, including a significant refining and marketing presence in more than 12 countries in the Asia Pacific.

SPEX owns 55% of a contract area in Northeastern Palawan, while Kuwait Foreign Petroleum Co. owns 30%, and South China Resources, Inc. holds a 15% interest.

The consortium has committed $24 million for the exploration. The area is said to contain the same reserves as that of the Malampaya field, also operated by SPEX.

Meanwhile, Aragorn Power’s area in the Cagayan Basin covers 748,000 hectares, awarded in February 2005.

Under the Norwegian-sponsored Philippine petroleum resource assessment project of the Energy department, the basin was estimated to have 400 million barrels of oil.

Nido Petroleum, meanwhile, focuses on Southeast Asia and has close to a three-million hectare footprint in the Northwestern Palawan Basin.

Its exploration portfolio includes the Southwest and Gindara prospect in Palawan, both with 50% interest, the Northwestern Palawan Basin where it has a 60% stake and the Galoc oil field where it has a 22% share.

Nido Petroleum earlier said it was targeting first oil from two oil wells in the Palawan Basin by 2010. The oil discovery was the first in the Philippines in almost 15 years.

Nido earlier estimated about 18 million barrels of oil in the area. The area, near the Malampaya gas field, is considered a prime location with a 50% success rate.

The government encourages oil exploration projects in the country to reduce its dependence on imported oil. The country consumes 300,000 barrels of oil daily.

The Energy department said the savings would only be realized through lower shipping costs for local consumption, since oil prices are pegged at international benchmarks.

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