Dragon Oil plc, controlled by the government of Dubai, plans to withdraw from service contract 63 in northwest Palawan, according to one of the joint venture partners.
Dragon Oil owns 40 percent of SC 63, while PNOC Exploration Corp. holds an equal 40 percent. Nido Petroleum Ltd. of Australia owns a 20 percent interest.
“During the quarter, Dragon Oil gave notice of its intention to withdraw from SC 63, subject to government approval,” Nido said in its quarterly report ending September.
Dragon Oil is an independent international oil and gas exploration company with a principal producing asset in Turkeminstan. The group’s headquarters is in Dubai.
Emirates National Oil Co. Ltd. L.L.C., a company ultimately owned by the government of Dubai, owns Dragon Oil.
The company decided to acquire a 40-percent stake in SC 63 in April 2014.
Nido, meanwhile, said PNOC Exploration as operator, was conducting post studies after drilling the Baragatan-1A well last year.
It said the company and PNOC Exploration were reviewing options to drill another well in the area.
The joint venture partners earlier plugged and abandoned the Baragatan-1A well prospect due to “low gas saturation.”
Nido officials said despite the setback, the Baragatan-1A well provided the SC 63 partners with valuable new technical information that now requires integration into the current subsurface models.
SC 63 covers an area of 10,560 square kilometers, including the East Sabina block located in offshore southwest Palawan. The area extends to the south toward Brunei and Sabah, Malaysia.
SC 63 is estimated to contain as much as 676 million to 977 million barrels of oil.
The Energy Department originally awarded the contract to PNOC Exploration (50 percent) and Nido Petroleum (50 percent) in November 24, 2006, with PNOC Exploration as the operator.