Nido Petroleum sets $36-M investment

Nido Petroleum Philippines Ltd., an Australia-based oil and gas company, is pouring in $36 million in the country in the next three years for investments in the sector, a ranking official said Tuesday night. Nido’s investment focus is the oil-rich basin of Northwest Palawan, where the company’s exploration area stands at over three million hectares, said Nido Petroleum managing director David R. Whitby. Part of the three million hectares covers government’s service contract (SC) 54 which has 540,000 hectares while service contract 58 covers 1.3 million hectares. Another contract, Area 1, covers 1.06 million hectares. Out of the planned investments of $36 million, Nido has already earmarked around $11 million for a $3.4-million seismic survey in SC 58, completed last month and a $7.6-million seismic survey in SC 54, to be completed by yearend. For 2007, Mr. Whitby said, Nido’s planned expenditures include the cost of the seismic survey in SC 58, estimated to cost over $3.2 million, the development drilling at the Galoc field with an estimated cost of $20 million and additional seismic surveys in SC 54, estimated to cost $2 million. In addition to these investments, Nido is also looking at additional major expenditures for Area 1, which covers 10,560 square meters. For this exploration contract, Nido has been chosen as the partner of state-run Philippine National Oil Co. (PNOC). Nido is awaiting the approval of the contract from Malacañang. Mr. Whitby said as soon as Area 1 is awarded to the NIDO-PNOC consortium, the group would immediately commence geological and geophysical activities, leading to the possible drilling of an exploratory well within four years. All these activities will have an estimated cost of around $25 million, Mr. Whitby noted. He said the Philippines needs capital and technological expertise to develop its oil and gas potential. Nido chief financial officer Gillian Evans said the $36 million has already been secured by its corporate notes issuance last September of $22 million. Another $20 million in debt financing is also being readied, she said. Nido is headquartered in Perth, Western Australia and is listed on the Australian Stock Exchange. Its board of directors include former Philippine Energy secretary Vincent S. Perez. The team led by Mr. Whitby paid a courtesy call to President Gloria Macapagal-Arroyo in Malacañang Wednesday morning informing her that the Galoc oil field can produce 17,500 barrels of oil per day in its first year of operations. — Iris Cecilia C. Gonzales with Josefa L. Cagoco/BusinessWorld