Australian outfit to proceed with exploration in Palawan

THE DEPARTMENT of Energy (DoE) has allowed Australian oil and gas company Nido Petroleum Ltd. to proceed with an exploration program to look for petroleum reserves in a service contract off northwest Palawan.

In a regulatory filing, Nido Petroleum said the Energy department had approved a sea-bed coring and multi-beam program in Service Contract (SC) 58, which lies adjacent to the Malampaya gas field.

"The sea-bed coring and multi-beam program will greatly assist the SC 58 Joint Venture in selecting which of the currently high-graded deepwater prospects could be the Sub Phase 3 drilling candidate," Jose Victor E. de Dios, Nido Petroleum president and chief executive officer, said.

Sea-bed coring and multi-beam program is an offshore exploration technique used to find petroleum systems in deepwater basins.

Nido Petroleum said operations would start in December.

"We are very pleased that the DoE supports and has approved these beneficial enhancements to the SC 58 work program," Mr. de Dios said.

"Importantly, the work program changes are aligned with Nido’s strategy to continue to mature its significant [northwest] Palawan asset base," Mr. de Dios added.

Nido Petroleum has over two million hectares of exploration and development assets in the northwest Palawan basin.

Nido Petroleum entered into a farm-in agreement with the Philippine National Oil Co. Exploration Corp. (PNOC-EC) in 2006 for a 50% participating interest in SC 58.

Under the terms of the farm-in agreement, Nido Petroleum will acquire the 50% interest upon completing a work program comprising three sub-phases.

Meanwhile, PNOC-EC said it might enter a joint venture contract with Australian mining giant BHP Billiton Ltd. toward the end of the year for drilling in SC 59, also in Palawan.

"They will be the operator. We own the service contract," Jacinto V. Paras, PNOC-EC chairman, said.

The listed exploration arm of the state-owned Philippine National Oil Co. said only BHP Billiton was interested in the project.

"They will retain majority because they will be the one spending," Mr. Paras said.

"Towards the end of the year, we’ll be able to start the contract. We’re at the final stages of negotiations," Mr. Paras added.

SC 59 in the West Balabac area is found off the southwesternmost tip of Northwest Palawan.

The field lies near the Kikeh Field in Malaysia, which is estimated to contain 400 million to 700 million barrels of oil. PNOC-EC believes that active petroleum systems in offshore Malaysia and Brunei continue into the Balabac area.

The Energy department awarded the service contract for the area to PNOC-EC in 2006.

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