The Department of Energy (DOE) has approved the plan of the consortium holding Service Contract 55 to drill an appraisal well off resource-rich Palawan to be called Cinco-1.
In separate regulatory filings by consortium members Pryce Corp. and the Ayala Group’s ACE Enexor Inc., they said the DOE had deemed viable the proposal to drill Cinco-1 and that it met the benchmarks for a floating liquefied natural gas (LNG) development.
SC 55 is a deepwater block off southwest Palawan Basin that covers 9,880 square kilometers.
According to Pryce, the location is proven to be “a regional oil and gas fairway” that can be a new wellspring of oil and gas for the country, just as the resource of the Malampaya gas field is expected to be depleted soon.
The drilling of “ultra-deepwater” Cinco-1 appraisal well is estimated to cost at least $3 million.
ACEX said the DOE also approved the consortium’s oil spill contingency plan as well as its health, safety and environmental plan.
The consortium was also instructed to submit a digital copy of the geological model of the Cinco prospect and a drilling montage before the start of the drilling activity.
Cinco is just one of 10 petroleum reserve prospects within SC 55. The others are Hawkeye-1, Palad, Uno, Tres, Quattro, Seis A, Seis B, Seis C and Seis D.
Pryce Gases Inc., a subsidiary of Pryce that is principally engaged in the importation and retail sale of liquefied petroleum gas, has a 25-percent participating interest in SC 55.
The remaining 75-percent participating interest is held by ACEX’s Palawan 55 Exploration & Production Corp.
The drilling of Cinco-1 is expected to begin in April next year or before the expiration of the DOE-declared one-year force majeure period on SC 55.
If this pushes through, SC 55’s consortium may be the first to conduct drilling operations in the West Philippine Sea since the drilling moratorium was lifted in October last year.
It was in May last year when the DOE approved the consortium’s request that the offshore project be put under force majeure for one year following the impact of the prolonged COVID-19 pandemic.
The consortium originally planned to start drilling at least one well in the area within the first two years of its program that took effect in April 2020.