Saturday, 14 June 2008

ExxonMobil to venture into oil exploration in Sulu Sea

BusinessWorld Online

Texas-based oil and gas producer Exxon Mobil Corp. (ExxonMobil) will invest on an oil exploration project in the southern Sulu Sea.

The commitment was made by Stephen M. Greenlee, ExxonMobil Exploration Co. vice-president, who made a courtesy call to President Gloria Macapagal-Arroyo yesterday in Malacañang.

"We told the President what we’re doing, what we expect to do in the future, and what our hopes and vision are for the area, and the President responded that she is very welcoming that we’re coming in.

"We are very happy that we’re working at such a good fiscal and regulatory regime here in the Philippines," he told the Presidential News Desk after his closed-door meeting with the President.

Mr. Greenlee said they are evaluating the amount of investment, but noted that implementing a drilling program usually costs as much as $100 million.

"So far, we have acquired seismic data out on the permit and we will evaluate. We just got the seismic data back into the office. We’re evaluating it. With continued encouragement from the seismic data we need to move forward and we will move forward if we elect to draw wells in the area," he said.

"We need to drill in the province and that will occur next year, so if we drill next year that will be through the middle of the year. That will be a very expensive proposal. Our drilling activities cost up to a million dollars so a drilling program could cost over a $100 million for us to explore the potential."

Mr. Greenlee said once their drilling activities succeed, the development of the site may require "several billions of dollars."

"Continued success would be a big deal for the Philippines — a major foreign investment in the country — and there will be a growth and multiplier effect in the region," he said.

Energy Secretary Angelo T. Reyes called the development "a major milestone" in oil exploration and development efforts.

"They are a big player, they don’t go into a country where the potentials are not great," he said.

On Tuesday, Mr. Reyes said ExxonMobil is eyeing Service Contract (SC) 56 which is being held by Malaysian exploration firm Mitra Energy Ltd.

In a statement, ExxonMobil confirmed that the government "has approved its [ExxonMobil] acquisition of a 50% operating interest in Block SC 56 located in the deepwater Sandakan Basin."

The company said it acquired the interest from Mitra Energy, which holds the remaining 50% interest in the more than 8,000-kilometer Block SC 56.

The statement said as an initial gesture of corporate citizenship, ExxonMobil Exploration and Production Philippines B. V. will contribute $25,000 (P1.11 million at P44.45:$1) to the World Food Program’s "Red Cup" campaign which provides daily mails to thousands of children in Mindanao.

ExxonMobil has subsidiaries in nearly 200 countries worldwide, including significant refining and marketing presence in more than 12 countries in Asia Pacific.

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