TOTAL - Offshore SC 56 Exploration

Project Status

Service Contract (SC) 56 is located in the deepwater Sandakan Basin southwest of the Philippine Islands. The Production Sharing Contract (PSC) became effective in August 2005 and covers an area of 8,620 square kilometres (sq km) SC 56 in water depths ranging from 0 to over 3,000 metres (m).

Following a series of transactions with the four original PSC co-venturers, Mitra Energy Limited became operator of the PSC in January 2006 with a 100 percent equity stake. Mitra began a 2D seismic data acquisition programme in Service Contract (SC) 56, which it has a 100 percent interest, on 15 November 2006 using the M/V Veritas Voyager vessel.  The seismic vessel will conduct a 2200 line km survey, planned for completion in early December 2006, with the final processed seismic data targeted to be fully interpreted by February 2007.

According to Mitra, an independent consultant Gaffney, Cline & Associates indicated that the best estimate for the block’s resource potential is for 1.48 billion barrels of oil equivalent with an upside resource of 4.85 billion barrels of oil equivalent for the top four leads. On the basis of the 2D data acquired, a 1,760 sq km 3D seismic survey was planned and subsequently acquired in the second quarter of 2007 in order to provide detailed sub-surface imaging of the prospective structures.

The 3D seismic survey on SC 56 was carried out by the WesternGeco’s flagship seismic vessel, the Geco Eagle, on 8 May 2007. The survey was completed on 24 June 2007 by the Geco Eagle, a 10-streamer, dual-source flagship vessel in the Sulu Sea. The 3D seismic programme recorded a total of 2,380 sq km of full-fold coverage with almost 100,000 CMP km of high fold data. The processing has commenced, and the final processed seismic data are expected to be ready for interpretation by mid-2008.

Mitra said exploration drilling is planned for the first half of 2009 as part of the phased commitment work programme and will be based upon a risked inventory of prospects emanating from the new 3D seismic interpretation. Meanwhile, Exxon Mobil Corporation announced earlier on 5 December 2006 that its subsidiary, Esso Exploration International Limited (EEIL), and Mitra have entered into an agreement to explore for hydrocarbons in SC 56. The farm-out agreement to ExxonMobil Exploration and Production Philippines B.V., was approved by the Philippines government on 13 June 2008. ExxonMobil indicated that the exploration and drilling programme could cost over US$100 million for the SC 56 joint venture as they assess the development potential of the site.

On 12 January 2009, Exxon Mobil and Mitra Energy, Ltd. have submitted a program Philippine Department of Energy to drill in the Sandakan basin. The drilling operations are expected to start in the fourth quarter of 2009. On 12 March 2009, an exploration program has been submitted to the DOE for SC 56 and Exxon Mobil has scheduled the drilling of the first well at the Sandakan basin in June 2009. It is believed that the operator plans to drill three wells at the block, which, based on initial data, could potentially yield commercially-extractable oil reserves of 100 million barrels.

ExxonMobil is understood as of 20 August 2009 to have delayed its planned exploration drilling programme in SC 56, which was originally scheduled for June 2009. 2D and 3D seismic data has identified several prospects in the block, including Mojito, Caipirinha, Mescal Norte and Mescal Sud. Mojito's potential reserves are estimated at 350 million barrels of oil equivalent. ExxonMobil has contacted the Philippines Department of Energy (DOE) about a revised drilling schedule for SC 56. Meanwhile, preparations are under way to begin exploration drilling later in 2009, with the operator expected to use the newbuild semi-submersible drilling rig West Aquarius to drill around three exploration wells in SC 56. (Topco)