Otto Energy abandons Duhat-2

MANILA, Philippines - Just days after announcing it has started drilling on the Duhat-2 exploration well in Leyte province, Otto Energy said yesterday it was abandoning the well for safety reasons.

 â€œOtto has reviewed the flow and pressure information obtained since drilling commenced at Duhat-2 and the forward plan is to plug and abandon the well,” the Australia-listed oil exploration company said.

It said the Department of Energy agreed it was too risky to continue exploring the well.

Early this month, Otto Energy and other members of the consortium behind Service Contract 51 said the Desco Rig 30 drilling rig has commenced work on the exploration well.

In a separate disclosure to the Philippine Stock Exchange, consortium member PetroEnergy Resources Corp. said on July 25, Desco Rig was drilling ahead when the well kicked at about 200 meters depth.

 â€œHigh pressure brackish water started to flow from the well which was initially contained using heavy-weight mud. Intermittent flows during the intervening period were finally stopped with a cement plug. The decision to stop drilling was made after careful consideration of the operational and environmental risks of drilling ahead,” it said.

Otto Energy said a continuous monitoring system has been put in place, and that local communities and the authorities have been fully appraised of the situation.

Aside from Otto Energy, other members of the SC 51 consortium include Trans-Asia Petroleum Corp., a wholly-owned subsidiary of Trans-Asia Oil and Energy Development Corp. of the Phinma Group, with a 6.67-percent participating interest and PetroEnergy Resources Corp., which has a 4.01-percent participating interest. Cosco Capital is also a member of the consortium.

Duhat-2 is one of several growth catalysts in Otto’s portfolio including Galoc Phase II, SC 55 and a seismic field being acquired in Tanzania.