NEWSFLASH

SULU SEA NEW OIL EXPLORATION SITE

Makati City, Jan. 5, 2000- Three foreign and three local exploration firms have banded together to drill two areas in the Sulu Sea in pursuit of 1.1 billion barrels of oil believed by experts to lie under the seabed.

Forming the consortium are US firm Arco International Oiland Gas, Prussag of Germany, and Malaysian Mining Co. Their local partners are Basic Consolidated Resources Corp., Oriental Petroleum and South China Petroleum. The three foreign companies account for about 85 percent of the project, Basic and Oriental split about 14 percent while the rest is held by South China.

The group is exploring for oil in two areas in the Sandakan Basin off Sulu. "Block A," code-named "Rhino", is seen producing some 420 million barrels of oil while some 685 million barrels are expected from "block B," or "Wilde Beast."

Preparatory drilling activities have so far cost the group $40 million, while another $30 million is programmed for operations once drilling begins in the Sandakan Basin off Sulu.

Sources in the oil industry said the group is expected to concentrate on Wilde Beast, which a seismic study had shown to have a greater promise of striking oil.