OTC: Palau prepares for licensing round
The tiny island nation of Palau is laying the foundations to offer its first licensing round with the assistance of the World Bank.
OGJ International Editor
HOUSTON, May 7 -- The tiny island nation of Palau is laying the foundations to offer its first licensing round with the assistance of the World Bank.
Bill Cline, chief executive of Gaffney, Cline & Associates, told delegates at a panel May 6 at the Offshore Technology Conference in Houston that the government was preparing the legislation and institutions necessary for a licensing round.
Cline told OGJ that World Bank had given a grant to Palau and it was "very early days," adding, "This is a pristine, tropical environment and the World Bank wants it protected and to open any licensing round with transparency."
By September, Palau expects to have written a hydrocarbon code and model agreement, petroleum operations regulations, environmental regulations, and hydrocarbon tax regulations.
There is already exploration interest in Palau, which has a population of 21,000 and lies 800 km east of the Philippines. Palau Pacific Exploration (PPX) is shooting an aeromagnetic survey on its concession in the north of the island and expects to finish next month, a senior company official told OGJ.
Justin Pettett, PPX finance and operations manager, said the company plans to drill two test wells in 2010. "We have 1 million acres of concession there and maybe Palau could have legislation in place by the end of the year."
PPX has a 75% farmin working interest in the block and will use the Synergy drillship to drill a wildcat in 100 ft of water to a target depth of 5,000 ft.
According to an independent report by H.J. Gruy & Associates, the Palau prospect could hold giant oil world-class reserve potential.
"Potential reservoirs, determined from seismic sequence stratigraphy, are thick Miocene age carbonate reef system with associated onlapping stratigraphic sequences with a thick overlying stratigraphic section," PPX said.
Contact Uchenna Izundu at email@example.com.