PHINMA PETROLEUM and Geothermal, Inc. (PPG) expects to complete in the next two months studies on an area off the Palawan shores for which the company holds a service contract that shows potential for gas exploration.
“We’re trying to complete the studies and hopefully within the year, within the next couple of months, and then on that basis, that will give us an idea of the potential target, the resource,” Eric T. Francia, PPG president and chief executive officer, told reporters.
He said the outcome of the studies would prompt the company whether it should start looking for “strategic” partners. He estimated the budget, should PPG proceed to drill, is around $30-$40 million.
Mr. Francia was referring to Service Contract (SC) 55, a deep-water block in the southwest Palawan Basin that covers an area of 9,880 square kilometers. PPG’s subsidiary Palawan55 Exploration & Production Corp. holds a 37.5% participating interest in the consortium behind SC 55. It is also the operator of the service contract.
PPG also has a 7.78% interest in SC 6 Block A in Northwest Palawan and 2.5% interest in SC 6 Block B also in Northwest Palawan. The three are the active areas being studied by the company.
Raymundo A. Reyes, Jr., PPG executive vice-president and chief operating officer, earlier told shareholders of the company that he was “excited” over the prospects of SC 55, which he said is the focus of its exploration efforts.
“Right now, [we’re doing] resource assessment. [The] quantitative interpretation of the previous seismic data is almost complete,” he told reporters. “We’re doing the phase one of drilling preparations.”
Mr. Reyes said the area is about 300 kilometers from the Malampaya gas field, which has 2.7 trillion cubic feet of gas and 100 million cubic feet of condensate. It is also near the cluster of four gas fields in offshore Sabah with reserves of over 4 trillion cubic feet.
SC 55 Block B is 200-300 kilometer south of Reed Bank, the area being disputed by the Philippines and China. Numerous petroleum prospects had been mapped by the former operators of the area, including PPG predecessor Trans-Asia Petroleum Corp., BHP Billiton Petroleum (Philippines) Corp., and Otto Energy (Philippines), Inc.
Palawan55’s partners in SC 55 are Century Red Pte. Ltd., an Australian company, and Pryce Gases, Inc., a unit of listed Pryce Corp.
“We already know that there is gas in Hawkeye,” Mr. Reyes said, referring to the exploratory well initially drilled by Otto Energy.
Mr. Francia said it was still too early to go ahead with talks to possible partners for SC 55 ahead of the resource assessment.
“At this point we’ll focus our resources first on SC 55 because the block itself has a lot of potential,” he said. “There are a good number of areas which haven’t been fully studied yet.” — Victor V. Saulon
