"We think the Philippines is a great area to focus all of our attention. The Philippines is actually one of those places where the basin is good," Nido Petroleum president Bryce Martin said recently.
Martin noted other big oil exploration firms that have expressed interest to enter into the upstream oil development in the Philippines such as China National Oil Corp. and Petronas of Malaysia.
"The oil in the industry in the Philippines is something we think is just at the point of taking off. When the bigger companies start coming and interest starts generating, to the great extent on the PNOC-negotiated deal on Spratly’s, Petronas is also here, and CNOOC is here, and that’s a sign of tremendous activity and we’re very excited about it," he said.
According to Martin, the company will announce their commitment to drill for oil and gas in the area, covering 537,616 hectares in Northwest Palawan.
"We are required to make a decision to drill a well before the end of the year. We are announcing our intention to drill," Martin said.
Last August, the Department of Energy (DOE) awarded SC 54 to Nido Petroleum, providing the company with a license to explore oil and gas for a period of seven years.
Martin said the investment cost of drilling operations for one well is between $10 million to $15 million but production costs could go as high as $200 million.
The company will drill up to four wells to determine the viability of the project.
"Northwest Palawan is a very prospective sedimentary basin in the Philippines and considering its past production history and present exploitation records, it is considered largely under-explored. We strongly believe there are more undiscovered oil deposits lying untapped in the oil bearing rock formations beneath the surface of the seabed," he said.
The service contract also provided substantial production and signature bonuses for the government and technical training assistance to DOE personnel.
For his part, David Whitby, managing director and board member of Nido Petroleum, said the Philippines has a strong potential for oil and gas reserves.
He explained that in Northwest Palawan, a total of 51 exploration wells were drilled. Of the number, 44 showed promise of oil reserves.
"One major discovery (in Palawan) is the Malampaya gas field, which has got the equivalent of 100 million of oil equivalent, that’s 600 million barrels. That’s a lot, that’s a huge discovery. The next discovery is 45 million barrels, that leaves a whole lot of discovery in between, there’s got to be something in between," Whitby said.
Nido Petroleum Philippines, with other Filipino oil companies as a consortium, operates the Nido and Matinloc fields, both offshore oilfields located at Northwest Palawan that contributes about 5,000 barrels of oil per day to the Philippine energy mix.
It also signed a farm-in agreement wherein they will redevelop and reactivate oil production at the Galoc Field, also in Northwest Palawan.
Australian-based Nido Petroleum Ltd., on the other hand, is an oil and gas explorer and producer with production and development assets in the Philippines and exploration acreage in the Southern Gas Basin of the North Sea. Nido Petroleum Ltd. is based in Perth, Western Australia, and has offices in Manila.
The company was formed in July 1999 when the Sydney Oil Company Drilling Trust (SOCDET) incorporated and changed it’s name to Nido Petroleum Ltd.
As part of this change Nido ‘inherited’ SOCDET’s interests in Service Contract 14 (SC14) in the Northwest Palawan basin, including the Nido and Matinloc oil production assets and the Galoc oil field.