Sunday, 1 August 2010

Exxon eyes fourth well; investment hits $400m

by Alena Mae S. Flores
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2010/july/31/business3.isx&d=2010/july/31

ExxonMobil Exploration and Production Philippines B.V., a unit of Exxon Mobil Corp., will drill a fourth exploratory well in Sulu Sea by the end of August.

The Energy Department said ExxonMobil had completed drilling of the third well called Palendag-1A covered by service contract 56. The contract area, which includes the gas-rich Sandakan Basin, covers 8,200 square kilometers.

ExxonMobil is now conducting plug and abandon procedures in the third well, which will take at least 10 days, before moving the rig to a new site.

ExxonMobil would spend another $100 million for the drilling of the fourth well, Energy Undersecretary Ramon Oca said. The company spent at least $300 million in drilling the first three wells.

The department said with the completion of drilling of the third well, ExxonMobil has fulfilled its fifth exploration sub-phase commitment under SC 56.

“ExxonMobil plans to drill immediately in SC-56 a fourth exploration well, Babendil-1, to a total depth of 4,531 meters [14,865 feet] using the drilling rig West Aquarius,” Energy Secretary Jose Rene Almendras said.

He said Exxon’s three exploratory wells had given the government “very useful data.’’

“Palendag-1A well was drilled to a total depth of 4,756 meters or 15,604 feet and encountered gas. Drilling in that well began last June 7,” Almendras said.

The energy chief said it was the second well that encountered gas in SC-56 block. Dabakan-1, the first well, showed gas indications.

“The data will now be analyzed by ExxonMobil. Studies are being conducted to integrate the results of all the wells into a further geologic understanding of the block’s potential,” Almendras said.

ExxonMobil as operator holds a 50-percent stake in SC 56. Mitra Energy (Philippines) Ltd. and BHP Billiton (International Exploration Pty Ltd.) owns 25 percent each.

All the risks during the exploration stage are borne by contractors ExxonMobil, Mitra and BHP Billiton at no cost to the government.

The Energy Department earlier estimated that the service contract could contain about 750 million barrels of oil, or enough to supply the domestic market for seven years.

Texas-based ExxonMobil is the world’s largest publicly-traded international oil and gas company.

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