article from manila standard 28/1/06

tks SB


Shell in joint oil search
By Alena Mae S. Flores
An international consortium led by Shell Philippines Exploration (Spex) B.V. and Kuwait Foreign Petroleum Exploration Co. (Kufpec) Philippines (Onshore) B.V. yesterday secured a contract to explore oil and gas off northeast Palawan.
The Department of Energy awarded service contract 60 to the group of Spex, Kufpec and listed oil exploration company South China Sea Resources Inc., which committed to explore the area over a seven-year period.
The service contact requires the consortium to invest a minimum of P1.27 billion ($24 million) and conduct seismic surveys and explore a 1.01-million hectare site in northeast Palawan.
The contract includes a 25-year production term in the event of a commercial discovery of petroleum. Spex owns a 55 percent stake in the SC 60; Kufpec Phils., 30 percent and South China, 15 percent.
DoE Secretary Raphael Lotilla, Spex managing directors Keith Perrin and Paul van der Harten, Kufpec deputy chairman and chief operating officer Abdullah Baroun and South China Chairman Edgardo Reyes signed the contract.
Shell vice president for Asia-Pacific exploration Wouter Hoogeveen, Kuwaiti ambassador to the Philippines Bader Nasser Alhouti, Kufpec senior legal officer Steve Byrom and manager for Far East and Australia Adel al-Khayat witnessed the contract signing.
Lotilla said the signing of the agreement was a further boost for foreign investments in the country?s energy sector.
?It is our hope that this new investment will result in a successful petroleum find and help push forward the country?s drive for energy independence in the midst of surging oil prices,? he said.
Spex is operator of the Malampaya natural gas field, while Kufpec is a wholly-owned subsidiary of Kuwait Petroleum Corp.
The signing of the new service contract is the 14th to be inked by the government since December 2004. The service contracts involve total investments of $193 million.
Hoogeveen said the company was ?pleased with the award of the contract which gives Shell and partners the opportunity to explore the relatively unexplored area east of Palawan Island.?
Al-Khayat said the project affirms the company?s strong interest in oil and gas exploration in the Philippines.
?We are on mode of expansion and we?re looking at the Philippines as one of our focus areas,? al-Khayat said.
SC 60 was formerly geophysical survey and exploration contract 99 (GSEC) which covered a relatively unexplored area of 1.8 million hectares.
GSEC 99 was awarded to a consortium of South China Resources in November 2000. In 2002, Spex assumed a 50 percent stake in the project. Kufpec in March became part of the group when it acquired an undisclosed stake from Spex.
Northwest Palawan is one of the promising sites for petroleum exploration identified by the Philippine Petroleum Resources Assessment Project Study.