Otto Energy expects to drill 3 more wells in Galoc

MANILA, Philippines - Otto Energy Ltd., the lead player in the consortium running the Galoc oil field, said it expects to drill three more wells at the area.

Paul Moore, Otto Energy managing director, said this would be part of the second phase of the development in the Galoc oil field.

In a report, Moore said they are hopeful there would be more oil reserves in the area.

“The increased confidence in the Galoc field performance and underpinning reserves is supporting the efforts of the joint venture in progressing towards sanctioning a Phase 2 development, potentially comprising between one and three new wells, in the field,” Moore said.

Situated in offshore Northwest Palawan, the Galoc oil field is estimated to contain around 10 million barrels of oil. It is estimated that Galoc field’s two production wells would continue to produce oil until 2018.

As of end-2010, Galoc has produced 6.3 million barrels of oil since its commercial production in October 2008.

Earlier, the Galoc group said there is a need to drill additional wells to increase production reserves by five million barrels.

Aside from Otto Energy, the Galoc consortium is composed of Nido Petroleum Ltd., The Philodrill Corp., Oriental Petroleum & Minerals Corp./Linapacan Oil Gas & Power Corp. and Forum Energy Philippines Corp.

Galoc is run by Galoc Production Co., which holds a 58.84 percent interest in the project. The latter is jointly owned by global oil trader Vitol Group and Otto Energy of Australia.

Based on a review commissioned by the field’s operator on the remaining oil reserves balance by independent firm RISC, there has been a 78 percent increase in Galoc’s proven reserves or the reserves with 90 percent certainty of being produced, from 0.39 million barrels of oil equivalent as of June 2010 to 0.69 million barrels of oil equivalent as of January 2011.

The Galoc field’s proven plus probable reserves, or the reserves with half the chance of being produced, was raised by 52 percent from 0.91 million to 1.38 million barrels of oil equivalent over the same period.

According to Moore, the increase was attributed to the better than expected reservoir performance to date and an extension of field life due to higher prevailing oil prices.