French oil and gas multinational Total E&P Activités Pétrolières is looking at a potential partnership with Australian firm Nido Petroleum Ltd. for the exploration and development of several petroleum blocks off Palawan island.
A source privy to the negotiations confirmed that Total has started conducting a due-diligence audit on Nido Petroleum’s existing oil and gas acreage in the Philippines. The source did not identify which of the areas Total was interested in.
Nido Petroleum has interests in 10 service contract licenses in the Philippines, namely Service Contract 14A Blocks A, B, C-1, C-2 and D; SC 6B; SC 54A; SC 54B; SC 58 and SC 63.
It is set to drill five exploration wells within the next two years to help unlock the potential of its top 15 prospects, which are estimated to yield a combined resource of 2.9 billion barrels.
In a presentation early this year, Nido Petroleum CEO Phil Byrne disclosed plans to drill a well at the Lawaan prospect, which is covered by SC 54A; Pawikan prospect within SC 54B; Balyena prospect in SC58, and Aboabo and Apribodo prospects in SC 63. The proposed drilling of these areas between November this year and January 2014 is expected to yield 1.18 billion barrels of oil at a total cost of $90 million.
Meanwhile, the source also disclosed that Total and Nido Petroleum would “definitely look at and most probably participate” in the PECR-4 bidding for the remaining oil and gas blocks up for auction—Areas 3, 4 and 5, which are all located in northwest Palawan.
Northwest Palawan is believed to be one of the most prolific petroleum basins in the country with a remaining resource estimate of at least 440 million barrels of oil and 2.2 trillion cubic feet of gas. It is also home to the $4.5-billion Malampaya deep water gas-to-power project, which is the most successful natural gas project in the country to date.
The two firms, according to the source, were supposed to submit a joint offer for the Philippine Energy Contracting Round 4 for petroleum held last April, but were not able to get the necessary approvals in time.