Ayala-led firm ACE Enexor Inc. has secured the approval of the Department of Energy (DOE) on its bid for one-year force majeure declaration on targeted oil and gas exploration and well drilling activities at its Service Contract (SC) 55 off Palawan basin.
In a disclosure to the Philippine Stock Exchange (PSE), the company stipulated that it received an official correspondence from the DOE dated May 11, 2021, “approving its request to place SC 55 under force majeure for a period of one year.”
The Ayala firm further noted that with the go-signal from the energy department, “the timeline of the SC 55 appraisal period will be adjusted accordingly;” and this shall be in accordance with the timeframe when the block under SC 55 shall also be set under the state of force majeure.
Previously, the DOE affirmed the entry of SC 55 into its appraisal period effective April 26, 2020 – and that was then premised on the drilling of at least one well within the first two years of the appraisal period.
But because of the lingering strain of the Covid-19 pandemic, the Ayala company also encountered considerable delays on its work program within the SC 55 petroleum block.
With the government-granted force majeure request of the SC 55 operator, new schedules on well drilling plans shall also be submitted to the DOE for its fresh round of approval.
ACE Enexor executives have recently indicated that preparatory works had already been carried out on the targeted well drilling – including project execution plan, rig market survey, tendering for long-lead drilling equipment and supplies, as well as preliminary well budgeting.
It was August last year when ACE Enexor had cornered the initial approval of the DOE on its planned well drilling – and that included a thumbs up on its work program budget of US$1,702,020.
The Ayala firm stated that its service contract’s advancement into appraisal phase was anchored on DOE’s evaluation and review that the block’s previous drilling at Hawkeye well “did encounter a significant volume of movable natural gas and is deemed to be a non-associated gas discovery.”
Back in 2015, Palawan 55 drilled the Hawkeye-1 well up to 9,580 feet (2,920 meters) at a cost of US$23.5 million; but extracted gas then failed to reach ‘commercial scale’ level.
The Ayala-led company subsequently carried out “quantitative interpretation of over 1,000 square kilometers of recently reprocessed 3D seismic data over the greater Hawkeye area and a large carbonate reef prospect,” and potential for commercial gas find is still largely anticipated.
SC 55 is a deep-water petroleum block covering an area of 9,880 square kilometers. It is said to be in the middle of proven regional oil and gas channel that stretches from Borneo offshore region in the southwest; and then to offshore Palawan in the northwest.
As emphasized, SC55 is not spanning across areas covered by the disputed territories in the West Philippine Sea. The block’s resource potential is projected to be mainly gas; and the ‘best estimate’ for prospective yield could be 89 million barrels of oil equivalent. ###