Kirkland AS, Oslo, has received a geophysical survey and exploration contract (GSEC) in a sizzling exploration and development theater off the Philippines.
The license covers about 6,000 sq miles of undisputed waters, with depths mostly less than 300 ft, and lies in the Reed Bank area off Northwest Palawan Island, where several major oil and gas strikes have been made recently (OGJ, June 8, p. 33, and Apr. 13, p. 27).
KIRKLAND PLANS
Kirkland has 1 year in which to carry out its seismic work commitment. The terms of the GSEC then give an option to drill one well in a 6 month period. Once the results have been analyzed, the company can either drill another well or enter into a service contract for the license.
Kirkland has a 65% share in the license, with the remainder split between Philippine companies Philodrill Corp., Beguet Mining Corp. subsidiary Petrofields, and Seafront Resources Corp. "The Philippines is one of Kirkland's main areas of activity," said Kirkland Commercial Manager Ralph Baxter. "With this license, the company is now the biggest foreign acreage holder in the region."
The company holds two other licenses. One is northwest of Palawan Island, near discoveries by Royal Dutch/Shell Group and Occidental Petroleum Corp., and holds two discoveries. The other extends south from Mindoro Island, where Kirkland has carried out remote sensing surveys and located seabed hydrocarbon seeps.
LICENSE POTENTIAL
While awaiting official approval of its GSEC application, Kirkland was able to work with reprocessed data from a few wells that tested gas and condensate on the south side of the Reed Bank license area in the 1970s.
Reports at the time indicated test rates of 4 MMcfd and potentially more. At the time, there was little interest in gas in the region, so the area was abandoned.
With gas now a viable target, Kirkland has mapped a number of large prospects on the license that merit testing. Baxter estimated the license area's potential gas resource at several trillion cubic feet.
MARKET PROSPECTS
The company initially plans to sell any produced gas to the Philippine electric power generation market. This would be similar to a Shell/Oxy venture that discovered Carnage and Malampaya oil and gas fields 120 miles east of the Kirkland license. If Reed Bank reserves live up to expectation, Kirkland might later seek other markets.
Kirkland is following with interest plans of a Japanese group to build a $20 billion Inner Pacific pipeline that would link countries on the southeast side of the South China Sea.
If the pipeline goes ahead, the need for a liquefied natural gas export project would be eliminated. But if the pipeline idea is shelved, the Reed Bank area's prospective reserves could justify an LNG plant, Kirkland believes.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
