Nido Petroleum plans Cadlao oil drilling project with investment of up to $100 million in the Philippines

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Nido Cadlao oil drilling project

Highlights

Nido Petroleum plans to invest up to $100 million drilling the Cadlao-4 well off Palawan, with further wells contingent on positive appraisal results.
Drilling costs for each Cadlao field well are estimated at $18 million to $25 million, with commercial production pending confirmation of recoverable hydrocarbon resources.
Consortium led by Nido Petroleum was awarded Service Contract 91 in April, covering 103,000 hectares including prospects estimated at 1–50 million barrels per target well.

Cadlao drilling plan and project scope

As reported by BusinessWorld Online, Nido Petroleum says in a document submitted to the Department of Environment and Natural Resources that it plans to drill new wells in the Cadlao oil field off Palawan province. The company says the project supports the Philippine Energy Plan 2020-2040, which calls for the resumption of indigenous oil and gas exploration in offshore northwest Palawan to help achieve energy independence.

The operator plans to drill the Cadlao-4 well to assess the field’s oil potential. If the results support commercial development, the company may drill one to three additional wells, with estimated drilling costs of $18 million to $25 million per well. Production would begin only after exploration and appraisal confirm commercially recoverable hydrocarbon resources.

Public scoping for the project is scheduled for Nov. 18-19 as part of the environmental impact assessment process.

Energy targets and consortium involvement

Nido Petroleum is part of a consortium that includes Forum Energy Philippines Corp., The Philodrill Corp., Oriental Petroleum and Minerals Corp., Alcorn Petroleum and Minerals Corp. and PNOC Exploration Corp. Forum Energy Philippines Corp. is a wholly owned unit of Forum Energy Ltd., in which PXP Energy Corp. holds an effective 98.08% interest.

The Department of Energy awarded the consortium Service Contract 91 in April after it applied for a development and production petroleum service contract to replace the expired Service Contract 6B. Service Contract 91 covers about 103,000 hectares in the northwest Palawan basin and includes the Cadlao and Bonita discoveries, along with more than 20 identified prospects and leads.

Nido Petroleum says each target well in the shallow-water portion of SC 91 is estimated to hold 1 million to 50 million barrels of oil. The Philippine Energy Plan targets the drilling of at least seven oil prospects and six gas fields, and seeks to produce 116 million barrels of oil by 2040. The Cadlao field was discovered in 1977 and produced about 11 million barrels of oil from 1981 to 1991.

We previously reported on a sharp sell-off in U.S. tech stocks tied to artificial intelligence, alongside oil prices climbing to around $110 a barrel and adding to inflation worries. In that context, higher crude prices were seen as a factor that could keep financing conditions tight and complicate the Fed’s policy outlook, reinforcing broader market volatility.

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