Total of France has entered the oil and gas exploration industry in the Philippines after acquiring a 75-percent interest in a contract area in Sulu Sea.
Total E&P Philippines B.V., a unit of the oil giant, said it acquired the 75-percent stake in offshore block service contract 56 from Mitra Energy of Malaysia. The 75-percent stake was previously owned by ExxonMobil Exploration and Production Philippines B.V. (50 percent) and BHP Billiton International Exploration Pty Ltd (25 percent).
The block covers 4,300 square kilometers, in water depths ranging from 200 meters to 3,000 meters.
ExxonMobil announced last year its decision to withdraw its 50-percent stake in SC 56 after finding "non-commercial quantities of gas" in South Sulu Sea.
ExxonMobil drilled the four wells in 2010 and 2011 and invested $400 million before declaring SC 56, which covered 8,200 square kilometers, including the gas-rich Sandakan Basin, as non-commercial.
Mitra Energy will retain a 25-percent interest in SC 56 after the farm-in agreement was signed.
Total is one of the largest oil and gas companies in the world. Its upstream business encompasses oil and natural gas exploration, development and production, along with coal, gas and power activities.
"With this new acquisition, Total continues to pursue its strategy to further expand its acreage in significant potential plays in new exploration areas, notably in deep offshore Asia Pacific," Marie Guillermou, Total senior vice president for Asia Pacific exploration and production, said.
Energy Assistant Secretary Ramon Oca welcomed Total's entry into the country's oil and gas industry, although he clarified the department had yet to accept a formal application from the company.
"It is a sign of growing investor trust and confidence in doing business in the Philippines plus the attractive fiscal regime we have for petroleum exploration in the Philippines," Oca said.
A new exploration phase actually started on Sept. 1, 2012 and Mitra will initially operate the seismic works including the re-processing of existing data and the 3D acquisition of additional 500 sq. km.
The operatorship will then be transferred to Total E&P for the drilling operations. The transaction is subject to approval of the Energy Department.
Total E&P previously partnered with Nido Petroleum Philippines Pty. Ltd., a subsidiary of Nido Petroleum Ltd. of Australia to look at opportunities offered under the Philippine Energy Contracting Round 4.
The partnership, however, failed to submit a bid in any of the 15 blocks offered under PECR 4.
Manila Standard Today
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