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PPG partner withdraws from Palawan exploration project

/ 04:48 AM September 21, 2019

Phinma Petroleum and Geothermal Inc. (PPG) yesterday said one of its partners in Petroleum Service Contract No. 55 has pulled out of the project to search for oil and gas in southwest Palawan.

PPG subsidiary Palawan55 Exploration and Production Corp. and the latter’s remaining partner, Pryce Gases Inc., are pushing for renewed drilling activity under SC 55, which covers an offshore area of 9,880 square kilometers.

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Palawan55 is the operator of the SC 55 project, which does not involve an area that is under dispute with other nations such as China.

Pulling out of the consortium is Century Red Pte. Ltd., which issued to Palawan55 a deed of assignment that transferred the Australian firm’s 37.5-percent interest in SC 55. This exercise needs the approval of the Department of Energy (DOE).

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“Century Red is effectively withdrawing as cocontractor in SC 55, leaving Palawan55 and Pryce Gases Inc. as the remaining cocontractors,” PPG said.

“Upon DOE’s approval of the assignment, the participating interest of Palawan55 in SC 55 shall increase to 75 percent,” the company said.

Last month, Palawan55 and Pryce Gases Inc. formally sought the green light from the DOE for them to enter an “appraisal period” effective Aug. 26. Such move commits the partners to drill an “ultra-deepwater” well within the first two years of the appraisal period.

The planned well—which will cost at least P154 million—is slated for drilling at a depth of more than 1,500 meters below sea surface in the second quarter of 2020.

The area covered by SC 55 is in the middle of a proven regional oil and gas fairway that extends from the productive Borneo offshore region in the southwest, to the offshore Philippine production assets northwest of Palawan.

Aside from drilling the well and after reinterpretation of certain seismic data outside of current study area, the consortium may conduct a new 3D seismic program to bring other prospects within SC 55 to “drillable” status.

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TAGS: Century Red Pte. Ltd., Palawan55 Exploration, Phinma Petroleum and Geothermal Inc., Production Corp., Pryce Gases Inc.
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