Spex-led group to drill for oil, gas in Palawan

The Shell Philippines Exploration B.V. (Spex)-led consortium will start early next year drilling activities at service contract 60 in Northeast Palawan, a Department of Energy (DOE) official said.

Spex has teamed up with Kuwait Foreign Petroleum Exploration Co. (KUFPEC) Philippines (Onshore) B.V. and South China Sea Resources Inc. in exploring oil and gas prospects at SC 60 in offshore Palawan.

“I think they found good prospects,” Energy Undersecretary Guillermo Balce said.

According to Balce, the group started last week its 2D seismic survey covering 2,000 kilometers of the area.

“The seismic vessel Veritas Voyager is now in Palawan. They started the survey last week,” Balce said.

Based on the plan, the SC 60 consortium will undergo a 3D seismic survey after completing the 2D survey to determine the oil and gas potential of the area.

The consortium intends to spend between $3 million to $5 million for the seismic study alone.

For the seven-year exploration period, the consortium committed a minimum investment of $24 million.

The DOE approved the application of the consortium for the conversion of SC 60 from a geophysical survey and exploration contract 99 (GSEC) last January.

SC 60 covers a relatively unexplored area of 1.8 million hectares in Northeast Palawan.

GSEC 99 was awarded to the consortium of South China Resources in November 2000. In 2002, Spex assumed a 50 percent stake in the project. KUFPEC became part of the group when it acquired an undisclosed stake from Spex.

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

SC 60 also includes a 25-year production term in the event of a commercial discovery of petroleum.