The Department of Energy has approved the acquisition of Total E&P Philippines BV of a 75-percent stake in Service Contract (SC) 56 off the Sulu Sea.
The interest was acquired from Malaysia-based Mitra Energy Ltd., which now holds a 25-percent equity stake in the service contract license, following the effectivity of the agreement signed between the two parties in August.
In statement posted on its website, Mitra Energy said it will initially operate the necessary seismic works for SC 56 including the acquisition of 500 square kilometers of additional 3D data.
After the data acquisition, the operatorship will then be transferred to Total E&P for the drilling operations.
Total believes that, with this acquisition, it will be able to pursue its strategy to further expand its acreage in significant potential plays in new exploration areas, notably in deep offshore Asia-Pacific region.
It was only in November last year that Mitra Energy gained 100-percent ownership of SC 56, after it acquired the 50-percent stake of Exxonmobil Exploration and Production Philippines B.V., and the 25-percent interest held by BHP Billiton Petroleum Pty Ltd.
The original consortium had already drilled four exploration wells within the Sandakan Basin worth some $400 million, over a span of only two years. In particular, two significant gas discoveries were found in drilling the Dabakan-1 and Palandag-1A wells and a further minor discovery at Babendil-1.
ExxonMobil, however, decided to withdraw from SC 56, as it deemed the resource in the block to be of “noncommercial quantities.”
However, previous estimates made by the DOE placed the potential oil resources within SC 56 at roughly 750 million barrels, enough to provide petroleum products for seven years.