By Alena Mae S. Flores

Exxon Mobil Philippines, a unit of US oil giant Exxon Mobil Corp., and Mitra Energy Ltd. of Malaysia plan to start drilling operations in the deep waters of the Sandakan basin in Sulu Sea by the fourth quarter of the year.

Drilling could cost up to $100 million, according to the 2009 work program submitted to the Energy Department by ExxonMobil, the largest oil company in the US and operator of Service Contract 56. ExxonMobil and Mitra equally hold a 50 percent interest in the contract area.

The drilling area covers 8,620 hectares offshore in Sulu Sea, considered one of the most prospective areas for oil and gas exploration as indicated by the previous drilling activities in the area.

No estimates of the oil reserves in the area was given but sources said ExxonMobil would not pursue the project if the potential was less than 100 million barrels.

Exxon tentatively set the drilling program in the fourth quarter of 2009 with investments estimated at $75 million to $100 million.

ExxonMobil is a leading international energy company whose subsidiaries have operations in nearly 200 countries and territories worldwide.

It has major exploration and production operations in Australia, Indonesia, Malaysia and Papua New Guinea.

It also has a significant refining and marketing presence in more than 12 countries in the region.

Mitra in 2006 entered into a farm-in agreement with ExxonMobil in SC 56. The Energy Department approved the farm-in contract last year.

Stephen Greenlee, vice president of Exxon Mobil Exploration Co., visited the Philippines in June last year and spoke with President Gloria Macapagal Arroyo about plans to search for oil in the Sulu Sea.

Greenlee said Exxon was ?very encouraged by the prospects? of the exploration.

?A drilling program could cost over $100 million for us to explore the potential, and then subsequent to that drilling... and if we?re successful and we find what we hope to find, then the development of the site would be several billion dollars,? he said.

?This agreement [with Mitra] aligns with our global business strategy to pursue business opportunities around the world that meet our investment criteria,? Greenlee said earlier.