Spex group to start drilling another oil well in northeast Palawan

MANILA, Philippines - The consortium operating Service Contract (SC) 60 in northeast Palawan said it expects to start next month the drilling of another oil well in the area, a Department of Energy (DOE) official said.

Energy Undersecretary Ramon Oca said the group, composed of Shell Philippines Exploration B.V. (Spex), South China Resources Inc (SCR) and Kuwait Foreign Petroleum Co., had informed the DOE of its plan to proceed with drilling activities in SC 60 in July.

Spex operates the Malampaya deep water gas-to-power project, country’s largest natural gas find, in northwest Palawan . KUFPEC is a wholly-owned subsidiary of the Kuwait Petroleum Corp., owned by the State of Kuwait while SCR is a Philippine company involved in, among others, hydrocarbon exploration.

 “They said by next month, they would proceed with another well drilling in the northeastern side of Palawan. They hope to start the drilling of a well using the same drill rig used in its SC 38,” he said.

He said the group is actually saving on cost as they have scheduled their drilling based on the availability of the oil rig.

Oca said Spex is also optimistic it would complete the drilling of its well at the SC 38 are in northwest Palawan.

Spex started drilling another well at SC 38 late April this year.

“Spex said barring any technical glitches, they hope to complete the drilling this week or next week on SC 38,” he said.

Spex holds 55 percent of the SC 60 contract, KUFPEC with 30 percent and SCR with 15 percent.

In January 2006, the DOE allowed the consortium to convert its geophysical survey and exploration contract (GSEC) 99 to SC 60.

The contract includes a 25-year production term in the event of a commercial discovery of petroleum.

In 2008, Spex officials said they have completed the seismic survey for SC 60.

Also in 2008, Spex completed the first 3D seismic survey as part of a work commitment under SC 60 to explore for oil and gas within the one million-hectare acreage in northeast Palawan.

Northwest Palawan is one of the promising sites for petroleum exploration identified in the Philippine Petroleum Resource Assessment project study conducted by the Norwegian Agency for Development Cooperation and the DOE.

During the seven-year exploration period covered by SC 60, the consortium committed a minimum investment of $24 million.