Shell Philippines Exploration B.V. and its partners are set to drill an exploration well in offshore northeast Palawan within the second half of the year.

?Spex is presently preparing to drill its commitment well by the second half of this year,? an industry said yesterday.

Shell Exploration operates Service Contract 60 on behalf of joint venture partners South China Resources Inc. and Kuwait Foreign Petroleum Co.

Shell Exploration holds 55 percent of the contract while Kuwait Petroleum owns 30 percent. South China holds 15 percent.

Under its contract with the Energy Department, the consortium plans to conduct seismic and exploration work in a relatively unexplored area of 1.8 million hectares in northeast Palawan.

The Energy Department approved the application of the consortium to convert the contract from geophysical survey and exploration contract (GSEC 99) to a service contract in January 2006.

The contract includes a 25-year production term in the event of a commercial discovery of petroleum.

The consortium committed a minimum investment of $24 million for the seven-year exploration period covered by SC 60.

Officials of Shell Exploration last year said they had completed seismic survey of SC 60.

?The survey enhances understanding the prospectivity of the license area and will determine the need to further explore in the bloc,? Shell Exploration said earlier. Alena Mae S. Flores