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PH weighs options on future of SC 55

By Riza T. Olchondra
Philippine Daily Inquirer
9:40 am | Friday, November 22nd, 2013


Energy Secretary Carlos Jericho Petilla: Weighing options. INQUIRER FILE PHOTO


MANILA, Philippines—The Philippine government is weighing its options on Service Contract 55 (SC 55) oil exploration area off Palawan after the operator, BHP Billiton Petroleum (Philippines) Corp., decided to withdraw, leaving its venture partner in limbo.

The project is supposed to be in the drilling phase.

Energy Secretary Carlos Jericho Petilla said BHP Billiton withdrew from the project “due to budget cuts.”

However, Petilla said, he may consider extending the timetable for the drilling phase if BHP partner Otto Energy Ltd. can present a plan for contracting the drilling rig even without the UK-based operator.

But without a plan or even an expression of interest from Otto Energy, Petilla said, he could cancel the service contract.

BHP Billiton and its joint venture partners earlier sought a new deadline for the drill work to 2014 from August this year, citing “force majeure.” The plea stemmed from the delay in receiving the Palawan Council’s clearance.

The Australian firm said it is taking legal advice on BHP Billiton’s continuing obligations.

In October, the SC 55 joint venture received clearance from the Palawan Council for Sustainable Development on the drilling of the deepwater exploration within the Cinco prospect off Palawan, months after BHP Billiton declared “force majeure” in May.

The SC 55 operator said in May that it declared “force majeure” to suspend timing of current permit obligations and preserve all permit rights as the Palawan provincial board asked for plans that BHP said were not originally required under Philippine Law and in previous exploration approvals.

SC55 hosts the Cinco prospect that is estimated to contain mean gas resources of 3.2 trillion cubic feet (tcf) along with 75 million barrels of condensate. Adjacent to SC 55 is the gas producing Malampaya field with proven reserves of 2.7 tcf (based on 2010 studies) that could be used up starting 2024.

Malampaya’s natural gas output fuels three major power plants that generate over a third of the country’s electricity supply. Malampaya also funds various energy projects through state royalties


Read more: http://business.inquirer.net/153469/ph-weighs-options-on-future-of-sc-55#ixzz2lKyapwMc
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