nido eyes full development from oil field

AUSTRALIAN OIL and gas explorer Nido Petroleum Ltd. said it has already received more than 500,000 barrels of oil from the Galoc oil field off Palawan, with further development being considered now that the field has reached commercial scale.


The Galoc oil field

In a report posted on Nido Petroleum’s Web site, President and CEO JV Emmanuel Araullo de Dios said the company is "certainly looking forward to many more barrels of oil. In the meantime, the field continues to produce and cargoes [are] being lifted for sale within Southeast Asia."

Nido Petroleum said the upward trend in world oil prices has been benefiting the company as it pursues another oil exploration block in Palawan.

"The higher oil price environment has been helpful to our cash position especially as we continue to progress work on the Tindalo development," Mr. de Dios added.

Nido Petroleum has decided to fast-track the development of the Tindalo offshore oil well in northwest Palawan to provide the company a second cash flow stream by next year. The Tindalo exploration block lies adjacent to the Malampaya gas and Galoc oil fields.

"Tindalo is occupying our efforts and energy. We are moving along completing our subsurface and engineering studies and evaluating commercial and production options," Mr. de Dios said.

"Our teams in Perth and Manila are working feverishly to get the appropriate permits and approval in place as well," Mr. de Dios added.

From a net loss in 2007, Nido earned $7 million last year with the start of the Galoc oil field’s onstream operations in October.

The Galoc oil field is estimated to contain 10 million barrels of oil, and produces between 12,000 and 14,000 barrels per day from two subsea wells.

Crude oil from Galoc is expected to generate foreign exchange savings for the country worth over a billion dollars during its lifetime. The oil field’s production is 6% of the country’s total demand of 300,000 barrels.

The Galoc oil field recently reached commercial scale following a test which showed the existence of long-term reserves.

"This validates the work done so far by the consortium and provides us the opportunity to fully develop Galoc if the technical data and oil prices will support the same," Mr. de Dios said.

"We continue to work with the operator and the rest of our partners to progress the ongoing subsurface work," Mr. de Dios added.

Galoc Production Co., where European trader Vitol has a 68.6% stake and Australian oil firm Otto Energy 31.4%, is the operator of the field. Galoc Production owns a 58.29% share in the field while the remaining 41.71% is split between Nido Petroleum with 22.28% and Philippine partners Philodrill, Oriental Petroleum and Minerals Corp./Lincapan Oil and Gas Power Corp., and others.

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