Nido Petroleum to abandon Tindalo oil well

Australia’s Nido Petroleum Ltd. will abandon the Tindalo oil well in offshore northwest Palawan as increasing presence of water in the reservoir has hampered oil production, the company said Wednesday. Abandoning the Tindalo well will be completed by January 2011, Nido Petroleum said in a disclosure to the Australian Stock Exchange where its shares are listed. “[The] increasing water-cuts and declining oil production rates during the period of the test indicate that continued production from Tindalo would be uneconomic and the decision has therefore been taken by the joint venture," the company said in the disclosure signed by Joanne Williams, Nido Petroleum’s deputy managing director. Water analyses from zones 1-3 of the production area indicated the "formation water," Nido said. Formation water is the natural water that lies under the oil reservoir. Nido is the operator of service contract (SC) 54-A which covers the Tindalo oil field. It holds 42-percent equity stake in SC 54-A, followed by Kairiki Energy Ltd. (30.1 percent), Trafigura Ventures III BV (15 percent), and TG World (BVI) Corp. (12.5 percent). Williams said Nido Petroleum is now thinking whether to demobilize or keep within the area the production equipment used for Tindalo. Nido is now looking at testing the Yakal oil discovery beside the Tindalo oil well. Yakal-1 has an estimated potential of 10.7 million barrels of oil, according to studies commissioned by Nido Petroleum. The company discovered Tindalo in October 2008, and started developing the well with its partners in December 2009. With the use of a submersible pump, the well initially flowed 16,000-18,000 barrels of oil per day. The output fell to 9,000 barrels per day of which 50 percent was water. Tindalo contains an estimated 1.5 million-9.1 million barrels of oil. The joint venture made more than $14 million in gross revenue out of Tindalo’s crude oil output, which Nido Petroleum sold and delivered to South Korea. — JE/VS, GMANews.TV