Singapore Oil Company Stresses Environmental Protection In Palau

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Palau Energy seeks license to drill for oil

KOROR, Palau (Island Times, August 19, 2014) – The presentations put on in Palau during the recent visit by Palau Energy Pte, Ltd top executive and CEO from Singapore was very informative. The presentations gave a brief introduction to their company and were primarily focused on environmental protection in Palau if a license were granted to drill for oil by the Ministry of Public Infrastructure Industry and Commerce as required under Palau’s new Petroleum Law.

On Thursday morning August 14, 2014 the Governor of Kayangel Jeffery Titiml with full approval of the Kayangel Legislature and Council of Chiefs signed the approval letter for 85% interest in the Palau North Block oil & gas concession in Kayangel State waters held for many years by Palau Pacific Energy, Inc (PPE) from McAllen Texas was transferred to the newly formed Palau Energy Pte Ltd from Singapore referred to now as "PE". PE will now control the project and spend what it takes to drill one well in compliance with the laws of Palau.

Palau Energy was formed by the owners of Cepu Satki Energy Pte, Ltd (CSE) who made a due diligence survey in Palau last November. Their first visit was widely reported in the Palau press that they were interested to drill an exploratory test well at Velasco Bank in the Palau North Block to check for oil & gas once a deal could be struck with PPE and approved by Kayangel State. Cepu Satki Energy is not allowed to operate outside it’s domain in Singapore and Indonesia using that name so they had to create a new corporation for the Palau project.

Once the deal was approved Kayangel Governor Jeffrey Titiml set about introducing Palau Energy and its new CEO Howard J Smith based in Singapore as the new Operator of the Palau North Block and they will acquire their 85% ownership in the concession once they have successfully drilled one exploratory test well within three years. PE estimates it will cost them up to $15 million US dollars to drill the one well at Velasco Bank if they can take advantage of a new super environmentally friendly drillship just built in Singapore earlier this year called the Norshore Atlantic. The drill ship is only available at the end of 2014 or January of 2015.

In the introduction presentations put on by the PE CEO Howard Smith for the OEK House and Senate at separate venues on Thursday August 14th as well as the EQPB Board of Directors at the Palm Bay Bistro last Friday the 15th Mr. Smith repeated their plans for protecting the environment of Palau by the use of this new state of the art drillship which has built in modern features like no other drillship making it the most environmentally friendly drill ship in the world today.

The costs are huge for the new ship perhaps around $500,000 per day fully outfitted for the project in Palau. That’s more than $20,000 an hour or $350 per minute from the time the ship leaves Singapore drills the one well in Palau and returns to Singapore. Smith said the costs are worth it because this ship offers maximum protection to Palau’s environment and he is aware that is the number one concern of Palau’s President Tommy E Remengesau Jr.

If granted the License the drillship will only be in Palau waters a very short time to perform its drilling job. The actual drilling operations in Palau will only take twelve to fifteen days to complete the exploratory test well and leave. The operations will include some local participation from Kayangel State the EQPB and other local businesses for logistics and emergency response services if needed. PE will provide professional training for local people involved in the project.

The drilling vessel Norshore Atlantic in addition to being environmentally friendly is also the most economically efficient drill ship in the world today and can accomplish the drilling in Palau in less than two weeks time said Mr. Smith who returned to Singapore Friday August 15th. Smith said he must go back to begin spending money on the final preparations for the environmental studies and other things required in Palau’s new Petroleum Law. The law which was drafted by the Palau World Bank Oil & Gas Task Force using petroleum law experts from all over the world was created by President Tommy Remengesau through Executive Order 241 back in 2007.

The Palau National Petroleum Act is now looked upon by many petroleum experts worldwide who have studied Palau’s new law and consider it a model law and an excellent accomplishment for both protecting the environment but allowing Palau’s potential resources to be studied, explored and produced safely in stages requiring different licenses and environmental protection levels as they progress to each stage.

In the Palau North Block PPE from McAllen Texas completed the study phase years ago under the existing laws at the time. They conducted seismic studies, areo-mag studies and geo-chemical studies all indicating the possibility of oil & gas potential at Velasco Bank. Now that the Palau National Petroleum Act is in effect the next phase is the Exploration phase and must be carried out with an Exploration License issued by the Ministry of Public Infrastructure Industry and Commerce after review and approvals of the Palau EQPB.

Mr. Smith said now that he has Kayangel State approval his company will be sending a letter soon to the Minister of PIIC making known their intentions to apply for a Exploration Permit under the petroleum law and are happy to fulfill and comply with all of the requirements of the law. Mr. Smith was quoted as saying " I shall return in about five to six weeks prepared and happy to present our final plans and studies in compliance with all the requirements procedures of the Palau National Petroleum Act to the Minister of PIIC."

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