Nido Petroleum and ExxonMobile Oil Gas Drilling

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Nido Petroleum produced first oil from the nearby Tindalo field to inch closer to becoming a major oil producer. The combined output of Galoc and Tindalo will pale in comparison with Malampaya’s natural gas output in terms of barrels of oil equivalent. Nido Petroleum, however, may fortify its status as a major oil producer if it discovers oil or gas in service contract 58, known as the West Calamian block, off northwest Palawan and adjacent to Malampaya’s gas field. ExxonMobil, meanwhile, is about to wrap up the drilling of a fourth wildcat well in Sulu Sea within the month. Exxon has been secretive about the results of its deep-water drilling operations in SC 56 that covers an area of 8,200 square kilometers and includes the gas-rich Sandakan Basin.

Nido Petroleum company said it found the “strongest evidence for light hydrocarbon micro-seepage” in the prospect after completing a deepwater sea-bed coring program in April this year. “The majority of core data indicates widespread micro-seepage of liquid hydrocarbons across SC 58 based on preliminary gas chromatography results,” Nido Petroleum said in a disclosure to the Australian Stock Exchange.

Nido Petroleum company’s report, while essentially prospective in nature, is encouraging but it will take actual drilling to find out if the West Calamian will produce oil or gas. Nido Petroleum will have its answer in 2012 when it starts spudding the area.

Until Nido Petroleum revisited the Galoc oil field, Shell Philippines has been the lone hydrocarbon producer in the Philippines since discovering the giant Malampaya gas field off northwest Palawan in the 90’s. The Australian firm drilled two wells in Galoc and started producing in commercial quantity two years ago, making it the second most active oil exploration company in the Philippines. Shell Philippines Exploration BV may no longer find itself the lone major oil and gas producer in the Philippines in the near future. Two other aggressive oil exploration companies Nido Petroleum Ltd. of Australia and ExxonMobil Corp. are busy scouring the South China Sea and Sulu Sea for the elusive black gold.

Exxon will have spent at least $400 million in drilling four wells in the Sulu Sea area since the spudding of Dabakan-1 last year. Exxon reported “hydrocarbon” shows in Dabakan-1 and in the next two wells. It has not publicly reported details about the results of its operations in Sulu Sea, preferring instead to drill ahead using the West Aquarius rig.

Exxon, the world’s largest publicly-traded oil and gas company, has the more realistic chance of becoming the biggest oil and gas producer in the Philippines than Nido Petroleum. The Sulu Sea prospect straddles the gas-producing Sandakan Basin of Borneo. Exxon, more importantly, has the financial muscle to commercially develop a discovery.