Nido Petroleum signs deal for Tindalo project

MANILA, Philippines - Australian firm Nido Petroleum Ltd. has entered into deals with two major exploration equipment providers for its Tindalo oil field development.

Nido deputy managing director Joanne Williams said they have awarded contracts to Knutsen Shuttletanker Pool AS for the floating storage and offloading (FSO) vessel, and Weatherford Asia Pacific Pte Ltd. for the production processing equipment in preparation for the drilling operations in the Tindalo field covered by Service Contract 54A.

“The execution of these two contracts secures the last of the major components of the production and crude storage facilities for Tindalo. I am very pleased to be able to welcome Knutsen and Weatherford to the Tindalo project team – Knutsen brings over 100 years of international marine operations experience while Weatherford brings their global experience in many facets of oil and gas operations. Their support and experience will greatly assist us in developing our Tindalo project, Williams said.”

The FSO, the M/T Tove Knutsen, is initially secured for a period of six months which may be extended at the joint venture’s option for up to three years. It is a double hulled oil tanker that has the capacity to store over 600,000 barrels of oil and has spent the last few years operating as a shuttle tanker in the North Sea.

Nido targets the first oil to be extracted from the Tindalo field by the second quarter of the year, with recoverable oil volume of 5.1 million barrels.

About $20 million is set to be spent by the company for extractingTindalo’s first oil, with operating costs of $250,000 per day.

On the other hand, the Weatherford production processing equipment is a modular system currently being assembled in Batam, Indonesia. This equipment will be used during the initial well testing program and will remain in place for the subsequent normal production operations.

The production system will be installed on the deck of the jack-up drilling rig ‘Aquamarine Driller’ and has been designed to process a maximum of 20,000 barrels of crude oil per day. This equipment will also remove produced gas and water (if any) from the oil prior to its transfer to the FSO.

Nido is a leading explorer in the North west Palawan basin with an exploration portfolio that extends across both the shallowand deepwater sectors of the Philippines premier oil producing basin. Nido operates SC 54A (50-percent interest), SC 54B (60-percent interest) and SC 58 (50 percent interest). It also has a 50-percent non-operated interest in SC 63.

Nido’s core producing asset is the Galoc oil field of which Nido has a 22.879-percent non-operated interest. Galoc lies within SC 14 in 300 meters of water, some 60 kilometers offshore Palawan Island. First production commenced on Oct. 9, 2008 through a simple two-well sub-sea development concept tied back to a moored FPSO.

In 2008, Nido completed a successful two-well exploration program in SC 54A which resulted a 100-percent strike rate yielding the Yakal-1 and Tindalo-1 oil discoveries.

Nido is planning to augment Galoc production by fast tracking the development of the Tindalo field with first production planned for the second quarter of 2010.