Gindara oil consortium prepares for drilling

The consortium that owns the oil concession Gindara prospect in northwest Palawan is preparing for drilling operations for the first half of 2011. The search for drill rigs has started, and the long-lead items for the drilling operation are being bought, according to one of the partners in the oil venture. The 3,184-square-kilometer Gindara prospect or service contract (SC) 54B is estimated to contain around 1 billion barrels of oil. Australia’s Kairiki Energy Ltd. holds a 40-percent stake in service contract 54B while Nido Petroleum Ltd. holds the remaining 60-percent. Kairiki told the Australian Stock Exchange on Wednesday that the consortium is in advanced discussions with a significant oil and gas company for SC 54B. “The discussions whilst advanced remain confidential and incomplete. Kairiki stresses that there is no guarantee that any final agreement will be reached despite these ongoing discussions," said Kairiki managing director Mark Fenton. It was earlier reported that the consortium is in talks with Shell Philippines Exploration B.V. and Chevron Malampaya LLC for a possible farm-in agreement over SC 54B. Shell and Chevron are among the many companies interested to partner with Nido and Kairiki over the Gindara prospect, a government official said. Shell and Chevron operate the Malampaya gas project, north of Gindara. The Malampaya field is estimated to contain a recoverable resource of around 600 million barrels of oil. The consortium has been looking for partners to partly finance the Gindara drilling estimated at $30 million. Nido head of exploration Jon Pattillo said that Gindara has matured into an outstanding prospect and is now the highest ranked drilling candidate in Nido’s northwest Palawan exploration portfolio “in terms of its excellent risk profile and potential significance to the company." The prospect is comparable in scale to Shell’s Malampaya field, 30 kilometers to the north, but located in only 320 meters of water and close to the joint ventures’ recent discoveries at Tindalo and Yakal in adjacent SC 54A, Patillo added. — JE/VS, GMANews.TV