DOE okays Total taking majority stake in SC56

MANILA, Philippines - The Department of Energy (DOE) has allowed a French oil giant to enter the Philippines for the first time by buying into a petroleum block in Mindanao.

This finalizes Total E&P Philippines BV’s purchase of a majority stake in Service Contract (SC) 56.

“The DOE has approved the interest transfer of Block SC 56, offshore Sulu Sea,” Malaysia-based Mitra Energy Ltd. said in its web site.

Given the approval, the local unit of French firm Total now owns 75 percent of SC 56, with the remaining 25-percent stake still held by Mitra.

“Mitra will initially operate the seismic works including the acquisition of 500 square kilometers of additional 3D data,” Mitra said. “After which, the operatorship will be transferred to Total for the drilling operations,” it added.

In September, Total announced its acquisition of a majority stake in the petroleum block.

Previous SC 56 license holders already spent $400 million to drill four exploration wells in the area.

Mitra said the contingent 3D seismic program will be conducted in 2013.

The drilling program is part of at least five oil and gas SC areas in the country that will be subject to various exploration works next year.

The Philippines continues to generate interest from local and foreign upstream oil firms as high oil prices make new exploration and development works financially feasible.

The DOE is pursuing energy independence and sustainability through the development of indigenous energy resources like coal, petroleum and natural gas.

To date, there are 27 SCs in the Philippines involving Shell Philippines Exploration B.V. and Nido Petroleum. However, only the Malampaya and Galoc oil fields are in regular production.