Nido upbeat on sales of Tindalo crude oil output

MANILA, Philippines - Australian oil exploration firm Nido Petroleum Ltd. said it is optimistic it could sell the first crude output production of its Tindalo oil field within the month.

“Crude oil marketing efforts are continuing with a positive response from potential buyers. Oil samples have been delivered to refiners in the Philippines, South Korea, Japan, Singapore and Thailand,” Nido deputy managing director Joanne Williams in a report submitted to the Australian Stock Exchange.

In October 2008, Nido discovered the Tindalo oil field off Palawan.

Nido has a 42.4 percent stake in Service Contract 54 A, which covers the Tindalo field, with joint venture partners Kairiki Energy Ltd. (30.1 percent), TG World Energy Corp. (12.5 percent) and Trafigura Ventures III B.V. (15.1 percent). The consortium started the well development in December 2009.

Nido has identified over 20 prospects in shallow water in northwest Palawan with an estimated potential of over 200 million barrels of oil in place.

According to Williams, the Tindalo crude “should trade well against regional and Middle East crudes” and proceed from the sale of the first crude shipment of between 200,000 to 250,000 barrels by mid-August.

Based on preliminary analysis, crude quality being extracted from the Tindalo oil field is considered as medium-heavy grade.

Previous data showed that Tindalo’s full-field recoverable volumes to be in the range of 1.5 million to 9.1 million barrels, with a mid-case of approximately 5.1 million barrels.

Nido said about 165,000 barrels of oil are now in the storage tanks of the floating, storage and offloading (FSO) vessel.

It said the Tindalo well was “giving an average daily net oil production since the last update of approximately 1,700 barrels of oil per day.”

Nido will conduct a workover of the Tindalo-1 well to increase oil production by decreasing or eliminating water from the well.

“The production processing system at Tindalo is currently operating at sub-optimal efficiency, particularly with respect to water separation and treatment. Produced water at Tindalo is designed to be discharged overboard once separated and treated. However, the majority of the water treated to date has not met the criteria for overboard discharge and has instead been exported to the FSO for later treatment, also resulting in limitations to the well’s total fluid production rate,” the company said.

Moreso, Nido said they are considering several options for removing the produced water that is currently stored in the FSO “and this activity will most probably be undertaken during the production shut-down associated with the forthcoming workover of the well.