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Joint venture starts oil drilling in Palawan


September 10, 2008

Philippines: Joint venture starts oil drilling in Palawan
Australian company Nido Petroleum Ltd and local firm Kairiki Energy Ltd have started drilling activities in their service contract (SC) area in the offshore Northwest Palawan basin, which includes the first exploration well to be drilled in the area in over a decade, local daily Manila Times reported Wednesday.

In a statement to the Australian Stock Exchange, Nido said that the joint venture began drilling the Yakal-1 exploration well covered by SC 54 on Monday.

The company said that the Yakal-1 well “is expected to take approximately three weeks to drill and if justified, will be suspended pending extended well testing.”

Yakal-1 is the first exploration well to be drilled in the Northwest Palawan basin, which is considered the most prospective area for petroleum exploration in the country in almost 10 years.

Once it completes its programme, the Nido-Kairiki joint venture will then move to a similar activity at the Tindalo-1 well, also covered by SC 54.

“Yakal-1 is the first of many wells we intend to drill in the Palawan basin,” Jocot de Dios, Nido chief executive officer, said.

The company earlier said that it had identified over 20 potential sites in SC 54 for possible drilling activities, including areas with prospective gas finds and areas that previously flowed oil
during testing conducted in the 1970s.

The latest development from the Nido-Kairiki venture bodes well for the Philippines’ efforts to develop indigenous sources of energy in a bid to cut its dependence on imported fuel.

Nido and Kairiki are among a number of foreign companies engaged in the local upstream oil industry following a Supreme Court decision in 2004 allowing foreign ownership in the mining and
exploration business.

An industry report released by energy consultancy firm Merritt Partners said that there are more than 10 foreign-listed companies engaged in oil and gas exploration in the country. They apart from 10 local companies, four multinational firms and a number of national oil companies in the local business.

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