Exploration and development operations are proceeding on several fronts in the northern, west central, and southwetern Philippines.
The Philippines Department of Energy announced in early May that Shell Philippines Exploration BV and units of Philippine National Oil Co. signed farm-outs that give Shell the option to participate in the Fuga Island exploration project after the drilling of the Fuga-1 wildcat. Fuga Island is at the northern tip of the Philippines.
The pact gives Shell Philippines the option to assume operatorship and acquire up to 50% of PNOC's interest in the project.
The deal was signed as PNOC and five other exploration companies spudded Fuga-1 on 2-million-acre Geophysical Survey and Exploration Contract 84 in Barangay Fuga, Fuga Island, Aparri. The Cagayan basin wildcat is projected to 7,100 ft at a cost of $4 million. DOE said the target is under the western part of the island in Babuyan Channel north of Luzon.
Interests in the drilling group are two PNOC units 39.375% each, Euro-Pacific of Australia 6.875%, Stirling Resources 6.25%, Hardman Resources 5.625%, and Nido Petroleum 2.5%.
Malampaya update
Shell, Texaco, and PNOC are adding oil development to the Malampaya gas project in the South China Sea west of Palawan Island.
The 1992 discovery well penetrated a 394-m gas column in Nido limestone at 2,956-3,494 m below derrick floor with average gas saturation of 35%. Underlying that was a 106 m oil column with 71% average oil saturation, excluding 38 m of very low porosity limestone at the base of the reef (OGJ, May 10, 1993, p. 00).
Shell this spring drilled Malampaya-5, the first of five planned development wells. Current estimates are more than 3 tcf of gas reserves, 120 million bbl of condensate reserves, and 250-400 million bbl of crude oil in place, DOE said. Oil production could start in 2001 at 20,000-25,000 b/d, the agency added.
The Philippines in April started up its first gas-fired power plant south of Manila which will run on diesel or condensate until the arrival of gas via pipeline from Malampaya in late 2001.
Sandakan exploration
Another wildcat may be drilled in the Sandakan sub-basin of the Sulu Sea basin in Philippine waters east of Sabah.
BP Amoco's Arco unit won approval to drill a second well on GSEC 74. Its first well had mechanical problems in 1998, but partners hailed it as having encountered two significant hydrocarbon zones (OGJ, June 22, 1998, p. 86).
That well, Hippo-1, went to TD 12,924 ft in 343 m of water. Partners said Hippo was one of 12 prospects identified on the block. Since then ARCO has acquired 3D seismic data in the area.
