An Exxon Mobil unit, Esso Exploration International Ltd., entered into an agreement with Mitra Energy Ltd., holder of the exploration contract for the deepwater Sandakan Basin to explore for hydrocarbons, the US parent said in a statement on its website.
Reservoirs beneath the Sulu Sea may hold the equivalent of 378 million barrels of oil, enough to meet the Philippines’ domestic crude demand for three years, the country’s Department of Energy said in a report last May.
Exxon Mobil acquired a 50 percent operating interest in the Sandakan Basin service contract covering some two million acres (810,000 hectares), with Mitra remaining as the operator during the exploration phase of the project, the oil firm added.
The deal is subject to Philippine regulatory approval.
"We are pleased to add this prospective acreage to our global portfolio and to have this opportunity to enter the oil and gas industry in the Philippines," said Steve Greenlee, vice president of Esso Exploration International.
"We look forward to working with Mitra as we explore for potential commercial resources in the block," Greenlee said.
Len D’Eramo, an Exxon spokesman, in a telephone interview said "we have pretty big holdings already in the Asia-Pacific region and this is a new entry for us. The acreage is quite huge."
Exxon Mobil’s major exploration and production operations in the Asia-Pacific are concentrated in Australia, Indonesia, Malaysia and Papua New Guinea.
Royal Dutch Shell Plc. and Chevron Corp. abandoned efforts to pump oil from another offshore Philippine project, the $2 billion Malampaya Oil Rim, in 2004 after finding too little oil to justify the expense, the US Energy Department said in a report last month. Shell and Chevron were also concerned about damaging a nearby natural-gas reservoir, the report said.
The Philippines pumps about 25,000 barrels of oil a day, just 7.2 percent of domestic demand, according to the US Energy Department in Washington. The country imports about 324,000 barrels a day from other producers. – AFP