Dubai-based firm Dragon Oil Plc is poised to invest in the petroleum block that covers the Baragatan prospect located in offshore Palawan, Philippines, according to Interaksyon.

Perth-based firm Nido Petroleum Ltd told the Australian Securities Exchange that it signed a deal with Dragon Oil for the latter's purchase of its 40% holding in Service Contract (SC) 63, the report detailed.

Under the terms of the said transaction, Dragon Oil will finance a little more than half the cost of the drilling in the Baragatan prospect. The Dubai-based firm will also shell out $3.4 million to Nido to cover previous exploration and development activity costs at the contract area, the report explained.

The said agreement needs to be approved by the Philippine Department of Energy, the report added.

Nido currently owns 50% of SC 63. The remaining interest in the petroleum block is held by state-owned firm Philippine National Oil Co-Exploration Corp (PNOC-EC), Interaksyon reported.