BP Petroleum Development Ltd. plans a wildcat on a block off Palawan in the Philippines on a farmout from Crestone Energy Corp., Denver.
Under the farmout agreement, BP received from Crestone 55% interest and operatorship of Geophysical Survey and Exploration Contract 54, a 5,822 sq mile block off western Palawan Island in the South China Sea.
Crestone was awarded GSEC 54 last fall. Under the GSEC, Crestone received a 60% interest with remaining interests allocated to a combine of Philippine companies (OGJ, Oct. 16, 1989, p. 34).
DRILLING PLANS
Under the farmout agreement, BP will at its sole cost and risk acquire at least 200 line km of seismic data and drill a well on the Cliff Head reefal prospect in 2,156 ft of water by February 1991. BP agreed to try to accelerate the spud date, perhaps by yearend.
BP plans to drill the well to about 11,155 ft or about 820 ft below the base of the Nido platform carbonate sequence, which is the commercial pay in Northwest Palawan.
Crestone estimates the structure's prospective resource at 450 million bbl of oil equivalent. BP has the option to drill and test a second exploratory well.
BP, currently negotiating with various seismic contractors based in Singapore, will conduct seismic surveys in June and July.
PROSPECTIVE AREA
Crestone, a privately held company, noted the Southwest Palawan area was explored by a number of companies in the 1970s and early 1980s and has a database of about 25,000 line km of seismic data profiles and 21 well control points.
Recent geological and geophysical studies show many of those wells were drilled with only reconnaissance seismic control, Crestone said. Further, several of the wells had significant oil and/or gas shows, it said.
GSEC 54, almost 300 miles long and 30 miles wide, extends to the Malaysian border of Sabah from the Northwest Palawan shelf, where Alcorn International Inc., Houston, is developing the Philippines' only commercial oil production (OGJ, July 10, 1989, p. 24).
Alcorn recently pushed production at North Matinloc field to 7,000 b/d.
GAS PRONE?
The Philippines Office of Energy Affairs (OEA) rates the Southwest Palawan shelf as having fair to good potential for gas.
The most recent discovery off Palawan was Occidental Petroleum Corp.'s 1 Camago gas/condensate strike off Northwest Palawan, where gauges were as much as 21 MMcfd of gas and 730 b/d of condensate (OGJ, Oct. 23, 1989, Newsletter). Oxy suspended the discovery in 2,416 ft of water in condition to be reentered but declared it a noncommercial gas well.
John A. Carver, Occidental International vice-president for Eastern Hemisphere exploration, estimated Camago's potential resource at 5-10 tcf of gas and more than 200 million bbl of condensate at a private industry breakfast for Philippines President Corazon Aquino in Dallas last Nov. 11, according to industry officials who attended the breakfast. Since then, however, Oxy has not disclosed further details about the Camago discovery.
There is essentially no natural gas infrastructure in the Philippines. However, the Philippine press has reported Oxy is leading negotiations with OEA, the World Bank, and Petroleum Association of the Philippines to propose and develop a national policy for transporting and marketing gas.
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