Australia-listed Otto Energy Investments Ltd., who has been operating in the Philippines for 10 years, has announced its plans to pull out of its interest in a Northern Palawan gas field after drilling projects showed insufficient amounts of gas reserves.
“Otto is would like to thank the Philippines Department of Energy (DOE) for the support that it has given over the ten years that Otto has operated in the Philippines. Whilst disappointing that SC55 has not delivered the significant discovery that was being sought, Otto has managed to undertake this large exploration program without exposing its balance sheet to the risk of the exploration outcome,” Otto managing director Matthew Allen said in a statement posted on their website.
The company, through its subsidiary Otto Philippines, has a 78.18 percent participating interest in the SC 55.
Otto told their joint venture partners they would no longer pursue interest in the site, and “will assign its working interest” to these other companies.
The company’s joint venture partners are Red Emperor Resources NL’s Century Red Pte. Ltd., with a 15 percent participating interest, Pryce Gases Inc. with 10 percent and Trans-Asia Petroleum’s subsidiary Palawan55 Exploration and Production Corp. with 6.82 percent.
“The joint venture will undertake a specialised geophysical study in the interim period to determine if further drilling activity is warranted in SC55,” the company said.
Located near the Malampaya gas field, the SC 55 is said to contain 2.2 trillion cubic feet of gas.
The Department of Energy (DOE) has cleared the two-year moratorium in the Service Contract (SC) no. 55 offshore Northern Palawan until December 23, 2017.
The government agency will determine whether further drilling needs to be done on the site.
In 2015, Otto finished drilling the Hawkeye-1 exploration well, believed to have 480 million barrels of oil, but only showed gas volumes lower than what was needed to be developed for consumption.