Aug. 21--THE Philippines' quest for indigenous oil suffered another setback after the consortium led by Tap Oil Ltd. of Australia abandoned drilling activities in the Lumba Lumba well in Sulu Sea.

In its daily drilling bulletin, the Department of Energy said the operator of Service Contract (SC) 41 disclosed that it has "decided to plug and abandon the Lumba Lumba well after encountering severe technical problems."

SC 41 is operated by Tap Oil with a 50-percent stake, Britain's Salamander Energy with a 35-percent share, and local players The Philodrill Corp., Oriental Petroleum and Minerals Corp., Philex Mining Corp., Anglo Philippines Holdings Corp., South China Resources Inc. and Universal Robina Corp. with a combined 15-percent interest.

The contract area was earlier projected to be one of the top high-impact wells in the Southeast Asian region because of its proximity to petroleum finds in Borneo.

Last month, the consortium led by Pearl Oil (Ragay) Ltd. also abandoned a prospective oil well in the Ragay Gulf in the southeast Luzon basin under SC 43 after the area turned out dry.

Pearl is a wholly owned subsidiary of Abu Dhabi-based Aabar Petroleum Investments Co. PJSC., which is engaged in petroleum exploration and production in Southeast Asia, controlling several oil fields in Indonesia and Thailand .

The petroleum exploration firm holds a 64-percent stake in SC 43 in partnership with Premiere Oil Philippines B.V., which has a 21-percent stake, and state-owned Philippine National Oil Co.-Exploration Corp., which has another 15-percent interest.

Another oil prospect in the Galoc field had suffered delays owing to inclement weather.

The government is relying on the development of more local oil finds to cut the country's crude import costs amid rising prices worldwide.

Apart from the search for oil in and around the country, the government is also banking on the development of indigenous alternative energy sources, including the establishment of a viable biofuels industry. Congress two years ago passed a law requiring the use of locally processed biofuels to jumpstart the process.

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