Exxon Mobil to spend $100M for East Palawan oil drilling

Texas-based oil giant Exxon Mobil Corp. will pour in up to $100 million for its oil drilling activities in East Palawan this year, official documents from the Department of Energy (DOE) showed.

In its drilling program submitted to the DOE, ExxonMobil said it expects to spend between $75 million to $100 million in 2009 two years after it informed the DOE of its plan to engage in an oil drilling activity in Palawan.

Through its subsidiary Esso Exploration International Ltd., ExxonMobil entered into an agreement with Malaysia’s Mitra Energy Ltd. to explore for hydrocarbons in service contract 56 located in the deepwater portion of the Sandakan Basin.

Under the agreement, the ExxonMobil affiliate will farm into the block for a 50 percent operating interest. Mitra will retain the other 50 percent equity interest and will operate the 2D seismic acquisition phase of the exploration program. 

ExxonMobil is a leading international energy company whose subsidiaries have operations in nearly 200 countries and territories worldwide. In the Asia-Pacific region, it has major exploration and production operations in Australia , Indonesia, Malaysia and Papua New Guinea. 

The company also has a significant refining and marketing presence in more than 12 countries in the region.

Aside from SC 56, six other exploration wells are expected to be drilled by various oil and gas exploration firms this year.

In an industry report, Merritt Partners energy advisory firm said these drilling activities include 41 in the Sulu Sea (Tap Oil, Salamander Energy and Filipino participants) and SC 54 in the Northwest Palawan Basin (Nido Petroleum and Kairiki Petroleum).

Otto Energy also disclosed plans to conduct an extended production test of the Calauit Field, subject to rig availability. Otto Energy Energy is also seeking farm in partners for its SC 51 (East Visayan basin) and SC 55 (West Palawan) contract areas.

Meanwhile, E.F. Durkee & Associates and Monte Oro Resources & Energy are planning to drill the Monte Oro-1 exploration well in onshore SC 52 (Northern Cagayan Valley). Monte Oro Resources is farming in to a sub-block within SC 52 for a 70 percent stake in this prospect.

“The outlook for exploration drilling activity in 2009 is unclear due to the lack of firm drilling commitments, the tight global market for offshore drilling rigs and the fact that some joint ventures are seeking to farm-out their acreage in order to mitigate drilling costs,” Merritt Partners said.

It added that following the rise in crude prices, a number of stranded oil resources in offshore Northwest Palawan basin are being reconsidered for their development potential such as the $86-million Galoc development project in the Northwest Palawan basin (SC 14C-1). Galoc is expected to be commissioned in March at 17,500 barrels per day.

Other oil field projects at various stages of planning and may follow in the footsteps of Galoc are SC 50 (Calauit), Nido (SC 14 and SC 54), Octon (SC 6A) and West Linapacan (SC 14C-2).