MANILA, Philippines - The government of Norway has extended financial support to the drilling of an exploratory well at the Camago-Malampaya oil rim by Filipino-owned Burgundy Global Exploration Corp.
PNOC-Exploration Corp. chairman Jacinto Paras said Burgundy is set to drill the exploratory well within the year.
“They might be able to get their first oil in the first quarter of 2010,” he said.
Last year, PNOC-EC took in a 15.1 percent participation in the project. Burgundy, the major operator of the oil rim, has a controlling 84.9 percent interest.
The oil rim is located within the Malampaya gas field covered by Service Contract 38 in Northwest Palawan. It is estimated to contain 41 million barrels of oil.
The SC 38 consortium, composed of PNOC-EC, Shell Philippines Exploration B.V. and Chevron Malampaya LLC earlier relinquished its right over the oil rim, saying it was “sub-commercial” in quantity.
“I understand, they recently had a tie-up with the Norwegian government to finance their contracting of equipment such as drilling rigs,” Paras said.
He said Burgundy is on track of meeting its commitments under its agreement with PNOC-EC.
“Yes, they are still on track, though they asked us for a six-month extension. We have certain milestones like the payment of signing bonus, but they were not able to complete due to the economic reversal,” he said.
“But they’re now on track owing to the partnering of the Norwegian government,” Paras added.
The company’s operation was not affected by the drop in oil prices. Last year, oil prices soared to as high as $100 per barrel, making oil and gas exploration very attractive to investors.
“The time the contract to Burgundy was awarded it was about $100 per barrel. But according to them $60 a barrel is still a reasonable business decision,” he said.
Officials from Burgundy earlier projected $700 million investments for the oil rim development.
Burgundy is the largest Filipino exploration company. It has forged a joint venture partnership with Union Fenosa Gas (jointly owned by Spain’s largest gas company and ENI of Italy), to explore and develop the oil and gas resources in offshore eastern Balabac Island in the Sulu Sea.