State-run PNOC Exploration Corp., the oil and gas arm of Philippine National Oil Co., wants to take a 20-percent stake in Service Contract 6B or the Cadlao oilfield in Palawan.
“We are already in advanced discussions to participate in SC 6B Cadlao field with drilling scheduled this year and production next year,” PNOC EC planning and budget department manager Alexis Dela Torre said in a recent Senate hearing.
SC 6B is located southeast of the Malampaya gas field and southwest of the Galoc oil and gas field. The Cadlao oilfield redevelopment targets 6.2 million barrels of economically recoverable oil.
PNOC EC submitted a letter of intent to Sacagsco Limited to farm-in to SC 6B, including the drilling of the Cadlao 4 well as the first stage of redevelopment.
Sacgasco holds its SC 6B interest in wholly-owned subsidiary Nido Petroleum Phils. Pty. Ltd. Nido has 9.09-percent stake in SC 6B and is increasing this to 72.727 percent. Its shareholdings will be reduced to 52.727 percent once the farm-in of PNOC EC is approved.
Other SC 6B joint venture partners are The Philodrill Corp. with 17.455 percent, Oriental Petroleum and Mineral Corp. with 4.909 percent, Forum Energy Philippines Corp. with 2.455 percent and Alcorn Petroleum and Minerals Corp. with 2.455 percent.
PNOC EC signed a letter of intent to Nido to farm-in to SC 6B and participate in the drilling of Cadlao 4 by acquiring a 20-percent participating interest.
PNOC EC will pay Nido $3.34 million upon execution of the agreement and an additional $10.1 million to be paid upon cash calls as operations commence. The final amount is dependent on the approved costs of the Department of Energy.
The farm-in agreement is subject to the approval by the DOE and the usual respective board and joint venture.
Sacgasco managing director Gary Jeffery said Nido was planning an extended well test in its two-well Philippines drilling campaign “as it can provide early cash flow.”
“Placing the Cadlao EWT [extended well test] as a priority in our planned drilling program, to be followed by a Nandino exploration well, with an EWT upon success, will make for an exciting and potentially transformational eight-month period for Sacgasco and Nido in the Philippines,” Jeffrey said.
Sacgasco plans to tap the DP2 drillship Deep Venture for the drilling operations as it can drill in water depths of 80 meters to 1,500 meters.
The Cadlao drilling and EWT is planned for 2023 and 2024. The company said and in the event of a successful EWT, “a full field development may include multiple wells with a dedicated oil production facility.”