This block comprises a promising portion of the Visayan Basin, where surface seeps are present and several sub-commercial oil and gas discoveries have been identified by previous participants. It is estimated that there could be reserves of 720 million barrels of oil equivalent within the block. The adjacent block in the north SC-44, operated by Australian company, Gas to Grid, has recently made a gas discovery and is currently drilling deeper for oil. Further north in SC-40, operated by Forum Oil of UK, a large gas discovery has been made and recently declared commercial. To the northwest in SC-46, operated by Japan Exploration Company and to the northeast in SC-51, operated by Australian Company Alcorn together with Trans Asia of the Philippines, seismic surveys are being currently conducted.
Phil-Mal PetroEnergy has signed a Service Contract with the Department of Energy, Government of the Philippines on March 1, 2005 for exploration and development of SC-49 for a period of 35 years. The Service Contract stipulates a Filipino Participating Incentive Interest of 7.5% and a Cost Recovery of 70% of the gross sales revenue to go the contractors. The remaining portion of the revenue is to be shared between the contractor and the government, on a 40% to 60% proportion.
Ranhill Energy's initial investment during the exploration period will be approximately US $2.8 million, which includes geological and geophysical studies and four onshore shallow wells. The first well is planned to be drilled in the fourth quarter of 2006. Field development should follow on a fast track basis to achieve first production within 18 months.
A Joint Venture Agreement was signed between Phil-Mal PetroEnergy of Philippines and Ranhill Energy Sdn Bhd on January 9, 2006 to formalize the participation of Ranhill Energy in the exploration and development of SC-49 and states that Ranhill Energy shall:
Deeds Of Agreement
A Deeds of Agreement has been signed on January 9, 2006 between Phil-Mal PetroEnergy of Philippines and Ranhill Energy Sdn Bhd stating the following:
Term Of The Service Contract
The Service Contract (SC) will be for a period of up to thirty-five (35) years as from the date of signing of the SC on 1 March 2005 (Effective Date). At the end of the first seven (7) years defined as exploration period as from the Effective Date. Phil-Mal shall have the option to request for another three (3) years extension. The Production Period will be for 25 years from the first production date.
Work Program And Budget
Phil-Mal shall commence Petroleum Operations not later than six (6) months after the Effective Date. The program to be carried out by Phil-Mal in conducting exploration operations pursuant to the terms of this SC during the first seven (7) Contract Years after the Effective Date is stated below.
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