Aussie firm starts drilling in Sulu Sea

Australian firm Tap Oil Ltd. and its partners have started oil drilling activities in their petroleum exploration block in the Sulu Sea.

In a statement, Tap Oil said they have commenced drilling at the Lumba-Lumba 1 well in Service Contract (SC) 41 last Saturday.

The company said SC 41 has an estimated recoverable reserve between 50 to 150 million barrels of oil.

The Lumba Lumba-1 well is located in the exploration block approximately 135 kilometers off the northeastern coast of Borneo in Malaysia.

Tap Oil is the lead operator in SC 41 with a 50-percent stake followed by British firm Salamander Energy with a 35-percent share. Local stakeholders in the SC are Philodrill Corp., Oriental Petroleum and Minerals Corp., Philex Mining Corp., Anglo Philippines Holdings Corp., South China Resources, Inc. and Universal Robina Corp. with a combined 15 percent interest.

The SC 41 consortium has already drilled a depth of 1,374 meters of the Lumba Lumba-1 well’s target of 3,000 meters as of yesterday.

The oil firm has completed its seismic surveys on the relatively under-explored block in the third quarter of 2007. The area is projected to be one of the top high impact wells in the Southeast Asian region because of its proximity to petroleum finds in Borneo.

Based on its findings, Tap Oil said SC 41 has the potential to be a “game changer” for the company as well as the consortium members because of its numerous prospective features.

Tap Oil said while minor oil has been recovered from some wells in the exploration block, “reservoir development and the identification of sand-prone fairways remains challenging and is recognized as the main exploration risks in the area.”

It noted that “encouragement is provided by offset wells which demonstrate a working petroleum system.”