Philodrill seeks new contract to continue petroleum operations in Palawan

UPSTREAM oil and gas firm The Philodrill Corp. is seeking a new government contract to continue and expand its petroleum operations in northwest Palawan following the expiration of its existing service contract.

In a regulatory filing on Thursday, the company said its Service Contract (SC) 13C2 covering the West Linapacan Block expired, ending the 15-year extension of the agreement originally awarded on Dec. 17, 1975.

“The new contract seeks to expand the current 17,724-hectare area to approximately 82,000 hectares by incorporating adjacent open acreage to the east,” Philodrill said.

West Linapacan is considered a mature exploration area with a proven petroleum system and remaining recoverable oil. The block contains two known oil-bearing structures, West Linapacan A and West Linapacan B.

Production at West Linapacan A began in 1992 with three production wells. Peak output reached about 18,700 barrels of oil per day for four months, although increasing water production over time reduced well performance.

“Four sidetrack wells were drilled from two of the initial wells after early water breakthrough, but had limited success in maintaining production,” the company said.

The field continued to produce until January 1996, when operations were shut in due to an uneconomic oil production rate compounded by low global oil prices. Total cumulative production from the field reached about 8.5 million stock tank barrels.

West Linapacan B, meanwhile, remains undeveloped. Drill stem testing showed that the well successfully flowed oil and gas, confirming the reservoir’s productivity.

Philodrill said available technical data indicate that potential hydrocarbon accumulations may extend beyond the currently defined structural boundaries of the field.

To move forward, the company, together with a joint venture partner, has applied for a development and production petroleum service contract, a contractual framework typically used for areas with existing discoveries and prior production.

Under the proposed contract, Philodrill plans to deploy modern technologies to revitalize production at West Linapacan A and bring West Linapacan B into commercial operation.

Separately, Philodrill said it was awarded three additional service contracts through consortiums.

Service Contract Nos. 80 and 81 are located in the southern Sulu Sea and cover areas of about 780,000 hectares and 532,000 hectares, respectively. Service Contract No. 86 covers approximately 132,000 hectares in the Northwest Palawan Basin. — Sheldeen Joy Talavera