Tuesday, September 11, 2018

Total to exit from Sulu petroleum block due to ‘non-comm’l’ find

Published September 8, 2018, 10:00 PM By Myrna M. Velasco

The Philippine upstream subsidiary of French energy giant Total S.A. has indicated to the Department of Energy (DOE) its plan to exit from its petroleum block in Sulu basin due to “non-commercial quantity” of prospective gas discovery.
According to the DOE, Total E&P Philippines B.V. will formally send a correspondence to the department on its intent to drop Service Contract 56 (SC) in Sulu Sea.
The block was acquired in 2012 by the French company via a farm-in deal with US firm Exxon Mobil, following the latter’s exit due to “non-commercial yield” of its four-well drilling in that particular service area.
It appears though that the narrative is being replicated in the data gathering and drilling outcome of Total at the petroleum block.
“To justify commercial investment in the petroleum block, Total was expecting commercial quantity gas find of 5.0 to 7.0 trillion cubic feet (TCF). It will need more than 5.0 TCF to justify the scale of investments, but the prospect based on the result of their drilling and as communicated to the DoE seems to be at just the level of 0.58 TCF of gas, so it’s not seen commercially viable,” an energy official has disclosed.
Total’s seismic survey and drilling data results, however, are reportedly being contested by its partner Mitra Energy, hence, that would be another matter that the relevant parties will eventually need to resolve.
Initial data prepped Sulu’s SC 56 block for prospective gross discovery of up to 6.736 TCF of gas and 169 million barrels of condensate.
Based on the work program it submitted to the DOE, Total scheduled the drilling of Halcon well in 2016, and targeted at water depths of approximately 3,000 meters.
In December 2016, Total deployed three MetOcean buoys and M/V Petani Selatan as survey vessel in South Sulu Sea for data gathering.
During Exxon Mobil’s time, the American firm drilled four wells in the block – resulting in the Palendag and Dabakan discoveries, although the quantities were seen not viable enough to merit commercial development at the field.
Sulu Sea had been one of the deepest and high-cost drilling that investors had delved into at Philippine petroleum blocks – that per well drilling entailed capital outlay of US$100 million.
Mitra Energy, which is Total’s partner and also the block operator, has had big dreams should there had been commercial finds in the area. It has been intending to offer the gas either to power plant off-takers or have it sold to Malaysia via a pipeline facility.

No comments:

Post a Comment