Nido Petroleum allots $100 million for Palawan exploration

MANILA, Philippines —  Nido Petroleum Philippines Pty. Ltd. is stepping up oil and gas exploration in Palawan, committing up to $100 million (about P6.3 billion) to drill new wells.

The company, which operates Service Contract (SC) 91 in the northwest Palawan basin, plans to drill the Cadlao-4 well to assess the field’s commercial potential.

If drilling results are promising, Nido Petroleum may conduct an extended well test lasting three to nine months to determine the well’s production capacity.

Subject to a declaration of commerciality, the company also commits to drilling one to three additional wells in the Cadlao field as part of its development activities.

Drilling costs are estimated at $18 million to $25 million (about P1.1 billion to P1.6 billion) per well, a document submitted to the Department of Environment and Natural Resources showed.

In April, the government awarded SC 91 to a consortium led by Nido Petroleum and comprising Philodrill, Oriental Petroleum and Minerals Corp., Alcorn Petroleum and Minerals Corp. and Forum Energy Philippines Corp.

Forum Energy is a subsidiary of Forum Energy Ltd., in which tycoon Manuel V. Pangilinan’s PXP Energy Corp. holds a 98.08-percent economic interest.

The service contract has a 10-year term to cover the appraisal, development and production of the Cadlao field, which has an estimated 6.2 million barrels of contingent oil resources.

SC 91 is located about 380 kilometers southwest of Manila and around 21 km west of the farthest island of El Nido.

The contract area is also situated approximately 11 km southeast of the Malampaya gas field and 40 km southwest of the Galoc oil and gas field.

Nido Petroleum said it already conducted considerable exploration activities in the northwest Palawan basin, including large-scale 2D and 3D seismic surveys, well drilling and extended well tests.

The company is now pursuing smaller, lower-risk pinnacle reef plays in the shallower waters of SC 91.

“Each target well in the shallow water portion of SC 91 is estimated to hold one to 50 million barrels of oil,” it noted.

Nido Petroleum’s exploration efforts support the country’s goal of reducing its dependence on imported oil.

The Philippines has sourced most of its crude oil from the Middle East, with Saudi Arabia as its largest supplier. This leaves the country highly exposed to disruptions in one of the world’s top oil-producing regions.

Last year, oil accounted for 47.7 percent of the country’s total final energy consumption, according to the Department of Energy.