SPEX group to conduct seismic test in N Palawan

The consortium of Shell Philippines Exploration B.V (SPEX), Kuwait Foreign Petroleum Co. Philippines Onshore B.V., and South China Resources Inc. will spend up to $5 million for the initial seismic exploration in service contract (SC) 60 in northwest Palawan by the last quarter of 2006.

"It’s safe to say that the SC 60 consortium will spend $3 million to $5 million for the 2D and 3D seismic exploration by November or December this year," SPEX managing director Facundo Roco said.

By the third or fourth quarter of 2007, Roco said they will be able to determine if they could proceed with the formal gas and oil exploration in SC 60. "In the latter part of next year, we will be able to confirm whether there are oil and gas reserves in the contract area."

Earlier this year, the consortium said it will invest some P1.27 billion ($24 million) to explore gas and oil prospects in offshore northeast Palawan.

The group signed SC 60 with the Department of Energy (DOE) in January to signal the start of the seismic and exploration work in the untapped oil prospects in the northeastern part of Palawan.

SC 60, converted from the Geophysical Survey and Exploration Contract 99 (GSEC 99), covers a relatively unexplored area of 1.008 million hectares.

Northeast 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.

During the seven-year exploration period of SC 60, the consortium committed to invest a minimum of $24 million or about P1.27 billion for the project. About $2 million to $3 million will be spent for the seismic study alone.

The consortium shall conduct, seismic and exploration work to find petroleum and optional exploration drilling within the first seven years.

SC 60 also includes a 25-year production term in the event of a commercial discovery of petroleum. The SC 60 venture consists of 55 percent SPEX stake, 30 percent KUFPEC Phils. and 15 percent SCR.

The consortium is a group with strong background in the upstream petroleum industry. SPEX is the lead operator of the $4.5 billion Malampaya deep water gas-to-power project in Northwest Palawan, the biggest investment so far in the country’s oil exploration sector.