Cadlao oil field is located in the Palawan Basin, offshore Philippines, and will be redeveloped after 30 years of being shut down due to the presence of significant potential reserves.

The redevelopment project will be executed by the Service Contract 6B (SC 6B) joint venture (JV), which is comprised of Nido Petroleum Philippines, Philodrill Corporation, Oriental Petroleum and Minerals Corporation, Alcorn Petroleum and Mineral Corporation, and Forum Energy Philippines Corporation.

A wholly-owned subsidiary of Sacgasco, Nido Petroleum signed a sale and purchase agreement with the JV in December 2021 to increase its working interest in SC 6B from 2.727% to 9.09% and was appointed as the operator.

The company further increased its working interest in the field to 72.72% through a farm-in agreement signed with the JV in March 2022. Following the farm-in agreement, Philodrill holds 17.45% and Oriental holds 4.09%, while Alcorn and Forum hold 2.45% each of the total working interest in the JV.

Nido Petroleum will fully fund the drilling and operation of an extended well test (EWT) as well as the subsequent development of the project under the farm-in agreement, which will also expedite exploration of the nearby East Cadlao oil prospect.

The JV is expected to submit the plan of development (POD) for the redevelopment project in 2022.

Cadlao oil field location

The Cadlao oil field lies within the SC 6B contract area of the Palawan Basin. The SC 6B spans an area of 533km² and lies at a water depth of between 20m and 90m.

The area includes the Cadlao and Bonita discoveries, as well as other prospects and leads that were identified on a reprocessed 3D seismic acquired in 1996. The 3D seismic data enabled the interpretation of a significant untapped attic volume on the Cadlao oil field.

The East Cadlao prospect, located 3km away from the Cadlao oil field, is one of the top drilling candidates among the identified exploration prospects in the area.

Cadlao oil field geology and history

Cadlao oil field is a carbonate pinnacle reef structure of the Miocene era. Discovered in 1977, the field started commercial production in 1981 based on sparse 2D seismic data. Between 1981 and 1991, the field produced 11.1 million barrels of oil from two production wells, Cadlao-1A and Cadlao-3, with peak production of 6,000 barrels of oil per day (bopd).

The field was producing 960bopd from the Cadlao-1A well before it was shut down in 1991 due to declining production and to utilise its surface facilities for another asset.

The Cadlao field is estimated to hold 6.2 million barrels of economically recoverable oil.

Cadlao extended well test and drilling programme

In the second half of 2022, a single well (Cadlao-4) will be drilled for the EWT to produce oil from the reservoir located at a depth of approximately 1,700m. The EWT is expected to provide a better understanding of the reservoir properties and reduce risks associated with the development.

The production from the EWT will be controlled from a converted jack-up drilling rig, and produced oil will be stored in a moored floating storage and offloading vessel (FSO) for transportation to a local refinery.

Depending on the success of the EWT, an East Cadlao-1 exploration well will also be drilled, to a reservoir depth of approximately 1,800m, at the nearby East Cadlao Prospect.

Cadlao oil field development details

The shallow water depths at the project site will allow for low-cost development concepts.

Full-field development of the Cadlao oil field will include the drilling of up to four wells and development of a dedicated oil production facility.

The East Cadlao Prospect may also be drilled, assessed and put into production from the Cadlao development.

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