Otto Energy on track to start Galoc drilling

MANILA, Philippines - Australian firm Otto Energy Ltd. is on track with its plan to commence drilling at the Galoc oil field in northwest Palawan next month.

In a disclosure to the Australian Securities Exchange, Otto Energy said the drilling rig Ocean Patriot has already left Singapore and is on its way to Manila.

Otto Energy said the rig has completed its five-year survey works and the drilling equipment required.

 â€œThe Ocean Patriot is expected to take approximately 10 days to arrive in the field. After the rig is anchored, it will proceed to spud the Galoc-5H and Galoc-6H wells,” Otto Energy said.

Galoc-5H and Galoc-6H drillings are part of the Galoc Phase II development approved by the drilling consortium last year.

The Galoc joint venture partners last year approved the Galoc Phase II development and are due to commence drilling in June 2013. The consortium expects first oil to flow in the fourth quarter of 2014.

Early this month, Otto Energy announced the entry of Kuwait Foreign Petroleum Exploration Co. (Kufpec) as partner in the Galoc project.

Otto Energy, the operator of Galoc, holds a 33 percent working interest in the project. Kufpec assumed control of 26.84473 percent working interest in the joint venture project following its acquisition of Risco Energy Pte Ltd., the parent firm of Galoc Production Co.

The Galoc field consortium is eyeing first oil to flow from the drilling of two additional wells by the first half, bringing total daily production to  about 12,000 barrels per day.

Total investment cost for the Galoc Phase 2 project is $188 million, of which Otto’s share is $62 million representing its 33 percent interest.

The Phase 2 development, which has the support of the joint venture, will require the drilling of two subsea wells, tied back to the existing floating production, storage and offloading facility.

Otto holds a 33 percent direct ownership in the Galoc project through Galoc Production Co. Other partners are Nido Production Ltd., Oriental Petroleum & Minerals Corp., Linapacan Oil Gas & Power Corp., Philodrill Corp. and Forum Energy Philippines.