MANILA, Philippines - Shell Philippines Exploration B.V. (Spex) has partnered with Nido Petroleum Ltd. in the Gindara oil prospect in northwest Palawan through a "farm in" agreement.
Nido president and chief executive officer Jocot de Dios said Spex has bought a 27% stake in the project, which is covered by Service Contract 54-B.
To earn its participating interest, Shell will contribute 75% of the cost of drilling the Gindara-1 exploration well worth about $24 million. It will also have to pay $2.5 million for seismic costs, and for its pro-rata share in the 2010 and 2011 work program and budget.
Nido Petroleum will remain as operator of the project.
De Dios said the transaction is still subject to certain conditions, including approval by the Department of Energy of certain amendments to SC54-B, and the assignment of the participating interest to Shell.
"This arrangement allows Nido to quickly drill Gindara, our leading prospect, and remain focused on maturing exploration drilling plans in SC 58 and SC 63. Nido is working to deliver the five well exploration program announced earlier in the year," he said.
Gindara lies approximately 50 kilometers south of the Shell-operated Malampaya gas field in SC38.