MANILA, Philippines - PNOC-EC, the exploration arm of state-owned Philippine National Oil Co. (PNOC), is partnering with an Australia-listed energy company to explore a potential oil field near the Malampaya gas facility in offshore Palawan.
PNOC-EC has expressed interest in farming into Service Contract 55 for a 15 percent participation, said Otto Energy Ltd., the Australian firm leading the consortium behind the project.
SC 55, located near the Malampaya gas field, includes the Cinco well.
In an announcement yesterday, Otto Energy said the commercial terms of the farm-in agreement have been threshed out and are being finalized.
“The farm-in is only subject to approval by the Office of the President of the Philippines,” Otto said.
Aside from PNOC-EC, Otto also continues to engage with other potential farm-in partners in the lead-up to the drilling of the Hawkeye-1 exploration well, targeted in the third quarter of the year.
“Otto is also seeking expressions of interest for drilling rigs suitable to drill Hawkeye-1. Final commitment to a drilling rig will be considered subject to suitable commercial terms being negotiated and completion of the farm-out program,” the company added.
The Hawkeye well has a significant oil prospect, with an estimated 480 million barrels of oil.
Otto CEO Matthew Allen said the company is pleased to partner with PNOC-EC given its track record in the oil and gas industry in the country.
“Otto Energy is very pleased to welcome a partner of the quality of PNOC Exploration Co. into SC 55. PNOC-EC brings substantial experience in the Philippines oil and gas industry to the SC 55 joint venture,” Allen said.
He said the company looks forward to progressing in the high impact exploration program with the Hawkeye-1 well in SC 55.
“Otto notes that the cost of this upcoming exploration program is likely to be considerably reduced as weaker oil prices impact on rig and contractor rates,” he said.
In terms of potential resource, the Department of Energy estimates that SC 55 has some 2.2 trillion cubic feet of gas.
Trans-Asia Oil and Energy Development Corp., the power generation arm of the Phinma Group, also has a stake in SC 55.