DOE clears initial drilling by South Sulu Sea group

MANILA, Philippines - The Department of Energy (DOE) has given its go-signal for the Service Contract 56 consortium in South Sulu Sea to commence with the drilling of the first well within this month.

At the same time, the DOE has approved BHP Billiton (International Exploration) Pty. Ltd.’s application to participate in SC 56.

The existing SC 56 contractors are ExxonMobil Exploration and Production Philippines B.V. and Mitra Energy (Philippines 56) Ltd., each with a 50-percent stake.

The DOE said Mitra Energy will assign half of its interest in SC 56, or 25 percent, to BHP Billiton.

According to DOE, its approval of BHP Billiton’s participation in SC will usher in the world’s largest integrated resources company into the Philippine upstream sector.

The DOE also noted the participation of ExxonMobil, the world’s largest publicly listed international oil and gas company. 

“The DOE is very pleased that companies of this caliber and expertise recognize the potential of the Philippine oil and gas sector, and looks forward with keen anticipation to execution of the SC 56 commitments,” Energy Secretary Angelo Reyes said. 

SC 56 lies 900 kilometers southwest of Manila , 200 kilometers northwest of Bongao town and 65 kilometers off the municipality of Mapun in the province of Tawi Tawi of the Autonomous Region of Muslim Mindanao (ARMM).

SC 56 is part of the Philippine government’s efforts to encourage investments in the energy sector leading to energy security for the country. 

The exploration phase will be undertaken at no cost to the country, with all risks borne by the contractors, ExxonMobil, Mitra and BHP Billiton, the DOE said.

The SC 56 contractors are also committed to conducting operations environmentally and socially. 

“They will take into account the environmental and social costs of the project to the host communities,” Reyes said.   — Donnabelle Gatdula