Business World
THE CONSORTIUM holding the concession covering the Tindalo oil well has decided to abandon the project due to declining production rates.
Nido Petroleum Ltd. said in a statement the consortium had declared the well “uneconomic.”
“Increasing water-cuts and declining oil production rates during the period of the test indicates that continued production from Tindalo would be uneconomic and the decision has therefore been taken by the joint venture to abandon the well,” the company said in its statement.
It added “the abandonment program will shortly be underway and will be completed in January 2011.”
Earlier, one zone of the well was shut down due to water coming into the bore hole.
Department of Energy Undersecretary Jose M. Layug, Jr. said in a telephone interview the department had been informed of the move.
“It is subject to verification and we will sit down with the consortium to ask what their next plans are. The oil industry is hit-or-miss so this happens all the time,” said Mr. Layug.
The Tindalo well lies in an area that may still yield more successful drilling sites. Nido Petroleum and other members of the consortium can still continue to explore the area.
The Tindalo oil field is located within Service Contract (SC) No. 54A in offshore Palawan, covering an area of 5,376 square meters. The Tindalo oil field was discovered in October 2008.
The concession was signed in August 2005. It will expire in August 2012.
The oil field had been undergoing extended well testing to determine the commercial viability of the well.
Nido Petroleum said the joint venture still had to decide on the withdrawal of the equipment.
“Whilst abandonment activities on Tindalo are underway, Nido, along with its joint venture partners will decide whether to demobilize the production equipment and hardware from SC 54A, or to retain the equipment for further work within the permit,” the company said.
Nido Petroleum is the operator of the field with 42.4% interest. Other owners are Yilgarn Petroleum Philippines Pty. Ltd. with a stake of 30.1%; Trafigura Ventures III BV, 15%; and TG World Corp., 12.5%.
Around 200,000 to 230,000 barrels of oil from the field hadbeen sold to a company in South Korea.
The company earlier said it would spend $20 million to extract oil from the Tindalo oil field.
It forecasted recoverable oil volume from the site at 5.1 million barrels and initial production rates of 7,000 to 15,000 barrels of oil per day. -- Emilia Narni J. David
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