Nido confirms new oil find in Palawan

MANILA, Philippines - Australia-based oil exploration firm Nido Petroleum Ltd. confirmed yesterday the presence of a relatively sizeable amount of oil in its Tindalo-1 oil well in Northwest Palawan.

According to Nido deputy managing director Joanne Williams, the company recorded a maximum flow rate of 18,689 barrels per day on natural flow, surpassing the company’s pre-test levels of 7,000 to 15,000 barrels per day.

On June 6, the oil exploration firm also reported a flow rate of 15,000 barrels per day. It said to date, the well continuously produces varying degree of oil production.

“The results from the stimulation and drill-stem testing program have exceeded my expectations,” Williams said.

As the operator of Service Contract 54A which covers the Tindalo oil project, Nido commenced with its drill-stem testing program last June 5.

The Nido official said that during the testing, the well flowed for a total of about 27 hours and a maximum oil flow rate of 18,689 barrels of oil unassisted and did not require use of the installed ESP (electric submersible pump) to provide artificial lift.

Williams noted that oil produced during the testing of Tindalo-1 was processed atop the drill rig and stored for later sale aboard the ‘Tove Knutsen’ rather than being flared or burned as is the usual practice.

“Preliminary analysis of oil quality indicates 27 degree API with no wax. Extensive sampling of the oil is being undertaken for reservoir fluid characterisation and crude marketing purposes,” she said.

In October 2008, Nido discovered the Tindalo oil field and subsequently developed it two months later or in December 2008.

Based on earlier estimates, Tindalo’s full-field recoverable volumes are expected to hit a range of 1.5 million to 9.1 million barrels with a mid-case of approximately 5.1 million barrels.

Nido president Emmanuel J.V. De Dios has expressed optimism this development will enable the company to continuously proceed with its drilling activities in the area.

De Dios said the company plans to explore other shallow water discoveries in SC 54A.

He said the successful flow in the oil find will also finance the company’s proposed five more well drillings in the Palawan area over the next 18 to 24 months.

The oil exploration company has been eyeing at least 20 prospects in shallow water with the estimated potential for over 200 million barrels of oil in place.

“Tindalo is only one of several discoveries in Nido’s shallow water acreage which have the potential to become significant cash generators. Moreover, with the results generated from Tindalo, the prospect of a success at the Gindara prospect which lies just outboard of this trend makes us even keener to commence the exploration drilling campaign,” De Dios said.

Nido has a 42.4 percent stake in SC 54. Its joint venture partners are Kairiki Energy Ltd (30.1 percent), Trafigura Ventures III B.V. (15.1 percent) and TG World Energy Corp. (12.5 percent).

The Tindalo oil field is the second Filipino oil field to start production since the early 1990’s – the other being Galoc oil field which started production in October 2008.

“It is further evidence of the increasing operational tempo of the upstream oil and gas sector in the Philippines, particularly in the Northwest Palawan,” the Nido executive said.

Late last week, Nido had asked for a trading halt until such time that it has made an announcement on its ongoing well testing.