Spex, Nido Pet team up for Palawan oil search

MANILA, Philippines - Shell Philippines Exploration B.V. (Spex) has partnered with Australia’s Nido Petroleum Ltd. in the Gindara prospect of Service Contract 54 Block B in the northwest Palawan basin.

Nido president and CEO Jocot de Dios said Spex farmed-in at SC54B, acquiring 27 percent of the current 60 percent stake of the Australian oil exploration firm in the project.

He said Nido, which will remain lead operator for the drilling of the Gindara 1 exploration well, expects to narrow down the Gindara drilling window to March to May 2011.

To earn its participating interest, Shell will contribute 75 percent of the Gindara-1 exploration well cost up to a maximum well cost of $24 million; pay $2.5 million towards past seismic costs; and pay its pro-rata share of the 2010 and 2011 work program and budget from the date of signing.

On completion of Shell’s farm-in, participating interests in SC 54B will be as follows: Spex, 45 percent; Nido Petroleum, 33 percent; and Yilgarn Petroleum Philippines Pty Ltd (Kairiki), 22 percent.

De Dios said the transaction is still subject to certain conditions, including joint venture approvals and the approval by the Department of Energy (DOE) of certain amendments to the service contract and the assignment of the relevant participating interest to Shell.

“It is with great pleasure that we welcome Shell as a partner into the SC 54B consortium. Shell is among the largest and most experienced oil and gas companies in the world. It has had over 96 years of operations in the Philippines and a deep understanding of its oil and gas sector,” De Dios said.

“This arrangement allows Nido to quickly drill Gindara, our leading prospect, and remain focused on maturing exploration drilling plans in SC 58 and SC 63. Nido is working to deliver the five well exploration program announced earlier in the year,” he added.

Gindara lies approximately 50 kilometers immediately south of the Shell operated Malampaya gas field in SC 38, the largest discovery made in the Philippines to date and currently on production.

For his part, Nido head of exploration Jon Pattillo said: “I am pleased to have Shell join Nido in SC 54B and in the drilling of the Gindara prospect next year. An important element of Nido’s exploration strategy has been to join hands with a company of Shell’s global stature who bring world-class development experience and access to cutting edge technology. Nido looks forward to working closely with Shell on this exciting project”.

He said Nido has now commenced detailed drilling planning, including the ordering of long-lead items and materials, to allow the Gindara prospect to be drilled during the March to May 2011 drilling window.