Shell Philippines Exploration drops out of Palawan oil project

Shell Philippines Exploration B.V. (SPEX) withdrew from Service Contract 54B, an oil exploration project in Northwest Palawan covering the Pawikan prospect, Nido Petroleum Philippines Ltd. said Tuesday.   The withdrawal took effect on Dec. 30, 2011, said Perth, Austrialia-based Nido Petroleum in a disclosure to the Australian Stock Exchange.   Following the withdrawal of SPEX from the project, Nido Petroleum said its equity stake in SC 54B will increase to 60 percent from 33 percent. Another Australian firm, Kairiki Energy Ltd., which previously owned 22 percent of the block will increase its equity stake in the project to 40 percent.   As of this posting, SPEX officials have not issued a statement on the matter.

 Despite SPEX’s withdrawal, the all-Australian consortium will pursue the project, Nido Petroleum noted.   "We remain optimistic on the prospectivity of the block especially by the potential exploration upside identified in the large Pawikan Lead to the south of the Gindara-1 location and only 10 kilometers from the producing Nido ‘A’ and ‘B’ fields,” Nido Petroleum CEO Jocot de Dios said.   “The recently acquired Pawikan 2D seismic survey is designed to mature this lead to prospect status and a potential future drilling opportunity. Preliminary seismic data from the Pawikan survey is encouraging," he added.   The Nido Petroleum executive also said that SC 54B does not require any drilling commitments before it expires in August 2013.   As such, “the timing of the drilling of a Pawikan well, should the joint venture decide on this, would be at the SC 54B partners’ discretion," he said.   The Energy Department approved the entry of SPEX into SC 54B in January 2011.   SPEX’s participation was instrumental in drilling the Gindara well, as it shouldered for 75 percent of Gindara-1’s exploration and seismic survey expenses. The exploration was abandoned in June after the well was found to be “water bearing.”   The Gindara well is approximately 50 kms south of the Malampaya gas field in SC 38, which is operated by SPEX, and is the country’s largest natural gas discovery still in production.   SPEX is a member of the oil and gas company Royal Dutch Shell Plc., which operates in more than 90 countries and territories. The company focuses on oil and gas exploration and production, liquefied natural gas and gas to liquids production, oil product marketing and production, and chemicals and renewable energy projects.   Nido Petroleum is a Philippine-focused oil and gas company with a dominant position in the North West Palawan Basin, holding a net acreage position of 14,641 square kilometer.  The Basin is a prospective address for oil and gas exploration with a history of multiple discoveries. — AL/VS, GMA News