Exxon pursuing 3rd well drill Written by Paul A. Isla / Reporter...

Exxon pursuing 3rd well drill

Written by Paul A. Isla / Reporter
Wednesday, 03 March 2010 22:22

AFTER its second wellthe Banduria 1showed optimistic yields, Exxon Mobil Corp.s local arm, ExxonMobil Exploration and Production Philippines BV, has decided to finalize its drilling program for its third well in Sandakan Basin, South Sulu Sea, under its Service Contract (SC) 56.

ExxonMobil executives said they want to further evaluate the reserves in the Sandakan Basin and another source privy to the issue said officers of the firm recently met and informed the Department of Energy (DOE) of their plans.

The source, who requested anonymity, said ExxonMobil may invest $100 million more to drill the third well. SC 56 covers an area of 8,200 square kilometers and is about 900 km southwest of Manila and 200 km northwest of Bongao, Tawi-Tawi.

ExxonMobil has already spent around $200 million for the Banduria 1 and Dabakan 1 wells. The Dabakan 1 well is about 65 km from Mapun Island, Tawi-Tawi while Banduria 1 is around 35 km from Dabakan 1.

Energy Undersecretary Ramon Oca said hydrocarbons were found in the wells surveyed. Had we found none, then it would be very hard to justify further exploration considering the costs and challenges, he said.

Energy Secretary Angelo Reyes said ExxonMobil has completed drilling Banduria 1 to a depth of 4,370 meters. The drilling in the Banduria 1 began on January 5.

Reyes said the company has fulfilled its fourth exploration subphase commitment under SC 56, a consortium led by ExxonMobil with members Mitra Energy Ltd. (25-percent interest) and BHP Billiton International Exploration Pty Ltd. (25 percent).

Drilling operations of the Dabakan 1 started on October 11, 2009, and ExxonMobil encountered gas. The two exploration wells have given us very useful data, which will now be analyzed by ExxonMobil. Additional studies are being conducted to evaluate the potential of the two wells and further appraisal plans, said Reyes.

SC 56 is part of government efforts to encourage investments in the energy sector.

Reyes earlier said the use of indigenous energy resources is paramount to the countrys energy self-sufficiency quest, and the contractors involvement in the energy sector is a good indicator of the countrys investment climate.

During this exploration operation, all risk is borne by the contractors ExxonMobil, Mitra and BHP Billiton, at no cost to the Philippine government. We look forward to further working with ExxonMobil under SC 56.  

We estimate the Dabakan well to yield about 750 million barrels. Given that projected yield, there would be enough to supply the countrys demand for petroleum products for seven years, added Reyes.