Nido Petroleum allots $20 million for development of Palawan oilfield

MANILA, Philippines - Nido Petroleum Ltd., an Australian oil and gas exploration firm, will spend about $20 million for the development of Service Contract (SC) 54A in offshore Northwest Palawan.

SC 54A or Tindalao 1 is a joint undertaking between Nido and another Australian-based upstream oil developer, Kairiki Energy Ltd.

This development lies adjacent to the Malampaya and Galoc fields, the country’s largest natural gas field and the first domestic oil development project in over a decade, respectively.

SC 54A is the shallow water part of SC 54, which is majority controlled by Nido Petroleum with a 60 percent stake. Kairiki Energy, on the other hand, holds a 40 percent interest in the block.

In a statement, Kairiki said the SC 54 consortium has firmed up its drilling program for Tindalo 1. “Tindalo 1 discovery well will be re-entered and completed for production,” the company said.

Under the drilling program, the group expects the first oil in the area to flow by the second quarter of 2010. The consortium estimated the initial production rate to hit between 7,000 and 15,000 barrels of oil per day.

The group earlier decided to split SC 54 to fast track the development of the Tindalo discovery in the shallow area of the block, which also houses three other oil finds.

The discoveries were made by Nido Petroleum during a drilling campaign it conducted in the area in 2008. They are the first oil discoveries found in the Philippines in the last 14 years.

“Since its discovery, the joint venture has been evaluating the field’s recoverable volumes, the development alternatives and how to accelerate development to bring production in on the near term,” Kairiki Energy said.

SC 54 covers the Yakal and Tindalo oil discovery fields, which have potential reserves of over 35 million barrels of oil.