MANILA, Philippines - The Department of Energy (DOE) is not worried by the decision of Shell Philippines Exploration B.V. (SPEX) to pull out its investment in Service Contract 54B in northwest Palawan.
“We understand that SPEX’s withdrawal from SC 54B is part of its risk management strategy given Shell’s curent portfolio of acreages under service contacts with the DOE and its proactive search and participation in Philippine Energy Contracting Round (PECR) 4 for petroleum,” he said.
The energy official pointed out that SPEX may have other plans for its oil and gas exploration business in the country.
“Shell is consolidating its exploration plans and pooling financial and technical resources for development of oil and gas in the Philippines,” he said.
According to Layug, SPEX has assured the DOE that it would continue its businesses in the country and, in fact, will join the PECR 4.
“Shell has expressed its continued interest in exploration opportunities in Philippines and will bid for new areas,” he said.
PECR 4 is a competitive bid round with the submission of bids for the various blocks being offered due between April and July 2012.
The award of blocks to successful bidders is expected on the second half of 2012.
It would be recalled that Exxon Mobil also decided to pull out from its investment in SC 56, also located in northwest Palawan, after no substantial reserves were found in drilling at least four wells in the area.
In a recent report to the Australian Stock Exchange, Nido Petrolem Ltd. said SPEX has decided to withdraw its participation in SC 54B (which includes the Pawikan prospect).
Shell owns 45 percent of the block, Nido holds 33 percent and is the lead operator, while another Australian firm Kairiki Energy owns 22 percent.