Oil drill ship Deepsea Metro I has started drilling a new well in the Galoc oil field off northwest Palawan.
Nido Petroleum Ltd. disclosed to the Australian Securities Exchange that “the rig has commenced drilling operations at the Galoc-7 appraisal well location in Block C1 of revised contract 14.”
This is the first appraisal well conducted this year, signaling the optimism in the country’s oil and gas industry despite low oil prices in the global market.
Nido managing director Mike Fischer earlier said the company looking forward to drilling operations in the Philippines “as we seek to unlock the potential for extending the field life of our cornerstone asset.”
The drilling will appraise the Galoc mid area prospect, an extension of the north of the Galoc field. A successful drilling will initiate the third phase of Galoc development, with oil first production set in 2019.
Nido unit Galoc Production Co. W.L.L. signed in January a binding rig contract with Golden Close Maritime Corp. Ltd. to tap Deepsea Metro I to drill the Galoc appraisal well.
Deepsea Metro I is a cutting edge drill ship. The rig is capable of simultaneous, safe and efficient operations and can drill in water depths of up to 10,000 feet and to a total depth of 40,000 feet.
Nido and its joint venture partners in the fourth quarter last year approved the drilling of an appraisal well to confirm the viability of a potential phase three development.
“If the Galoc-7/7ST is successful, the subsequent development of the GMA will materially increase reserves and production, substantially extending the life of the Galoc field,” Nido said earlier.
Production at the Galoc field is currently declining. Based on Nido’s proven reserves, reserve is expected to become sub-commercial in 2019.
The Galoc oil field produces an average 5,079 barrels per day. The field has produced over 17.8 million barrels since 2008.
The successful development of the GMA will extend the life of the Galoc field to the first quarter of 2027.