Nido's Philippines well flows crude

Sydney: Nido Petroleum Ltd, the Australian explorer focusing on the Philippines, confirmed it made a discovery at the Yakal-1 well, the first oil-find in the southeast Asian nation in 14 years.

The well, in the SC 54 permit area off Palawan province, found oil extending over 78 metres and potentially as much as 93 metres, Perth-based Nido said yesterday in a statement to the Australian stock exchange.

The latest estimate of the oil column is bigger than what Nido reported earlier this week.

The Yakal-1 well is the first to be drilled in almost 10 years in the northwest Palawan Basin, which Nido describes as the most promising offshore area in the Philippines.

It will be followed by the Tindalo-1 well in the same permit. Nido said earlier this month that each of the wells is targeting a discovery of between 2 million and 20 million barrels of oil.

"The Yakal-1 discovery is an important first step in realising the joint venture's strategy to rapidly commercialise the SC 54 area," the Nido deputy managing director, Joanne Williams, said in the statement.

Should more discoveries be made in the region, several of the finds could be combined and operated through a single production system, she said.

Nido climbed as much as 7 per cent to 30.5 cents at 11.30am (local time) in Sydney. Kairiki Energy Ltd, Nido's 40 per cent partner in the well, rose as much as 5 per cent.

Significant increase

Kairiki is also based in the Western Australian capital. The gains compared with an advance of as much as 1.9 per cent in the exchange's benchmark energy index.

Separately, Nido said poor weather was delaying the start-up of the Galoc oil project in the Palawan Basin, in which it has a stake.

A replacement support vessel, able to operate in rougher seas, is due to arrive at the field tomorrow and should minimise the potential for further delays, it said.

'Remaining activities'

"The remaining activities before first oil are expected to take approximately 6-8 days, given suitable weather conditions," Galoc Production Co., the venture operator and 58 per cent owner, said in a statement sent by Nido to the exchange.

Philodrill Corp., Oriental Petroleum & Minerals Corp., Forum Energy Philippines Corp., Alcorn Gold Resources Corp. and PetroEnergy Resources Corp. own stakes in the Galoc project.