Philippines-focused Nido Petroleum has signed an alliance agreement with an early production specialist as it sets about drilling two new offshore wells and delivering the Cadlao project.

Nido is planning a two-well drilling programme this year in the offshore Palawan basin including an exploration/appraisal well called Nandino in Block SC54 and an extended well test at the Cadlao oil redevelopment project in Block SC6B in 2022, Nido’s parent company Sacgasco said.

Nido aims to award key contracts this year for drilling and production equipment for the two-well campaign.

Nandino has a prospective resource of 21.9 million barrels of recoverable oil.

The Cadlao field previously produced 11.1 million barrels of oil between 1981 and 1991 and at the time production ceased the field was still producing 950 bpd.

Cadlao contains 6.2 million barrels of oil on a best estimate contingent resource basis, according to Sasgasco.

In the event of a successful drilling operation at Cadlao and depending upon the field data obtained, a full field development may include up to four wells with a dedicated oil production facility, like a mobile offshore production unit.

Sasgsco said Nido has signed an agreement covering the extended well test and early production systems with Production Solutions Asia (PSA), an Asia-based oilfield service company specialising in surface well testing, early production systems, well flow-back/clean-up service, well remediation and brownfield development, sand separation and filtration systems, gas compression service and surface fluid pumping services.

Sacgasco’s managing director Gary Jeffery said: “The agreement to work together for mutual benefit in the offshore Philippines is an important step for Sacgasco/Nido.

“PSA and their personnel have been involved in the testing of many of the wells offshore Palawan and bring experience and access to equipment which is expected to facilitate the early production of the oil already discovered in the Nido [Sacgasco] service contracts.

“Early development of these discoveries and any discovery at the proposed Nandino well will be very valuable in the current and anticipated high oil price environment.”

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