Nido Petroleum investing $72 million for Cadlao, SC 54 exploration

MANILA, Philippines — Nido Petroleum Philippines Pty. Ltd. is spending $72 million for its exploration activities in Service Contracts 6B and 54 in northwest Palawan.

The Department of Energy (DOE) recently cleared Nido Petroleum to conduct the site survey of drilling locations in SC 6B by the last quarter of this year, Energy Secretary Raphael Lotilla said in a media briefing.

The company will be drilling two wells – one exploration and one appraisal – by the first half of next year.

SC 6B covers the Cadlao old oil field that was last produced in the early 1990s with over 11 million barrels.

The technical operatorship of this oil field was assigned to Nido Petroleum from the Philodrill Corp. last February to fund the 100 percent development costs, which include drilling, extended well tests, and subsequent development of the said oil field.

Meanwhile, DOE has also allowed Nido Petroleum to proceed with its site survey in SC 54, Lotilla said.

SC 54, located in the Northwest Palawan basin, holds four discoveries including Tindalo and Yakal during their 2008 drilling campaign.

This area contains the associated portfolio of shallow water discoveries and targets along the Nido field oil trend.

Based on its submissions, Nido Petroleum budgeted $16 million per well and $40 million for undertaking extended production test, DOE Undersecretary Alessandro Sales said in the same briefing.

“So if you count that $16 million (for SC 54), another $16 million and $40 million (for SC 6B), so total of $72 million dollars for both contracts,” he said.

“When they drill it, they will test the flow rate for a period to determine how to optimize future production and determine the more appropriate way in installing permanent production facilities,” Sales said.

With the drilling and extended production testing slated next year, the Cadlao oil field could start producing in 2024.

“If extended production test is successful, permanent production facilities can be installed by the first half of 2024 and continued permanent production can proceed from that period onwards,” Sales said.

In terms of volume, the Cadlao oil field production will be quite small compared to the country’s demand for oil.

“About five to six million barrels are being targeted to be redeveloped. In terms of daily production, this could come out to a high of 15,000 barrels to a low of 5,000 barrels and these fields will normally decline in time,” Sales said.