Otto Energy concludes Galoc drilling

MANILA, Philippines - Australian firm Otto Energy Ltd. said it has successfully concluded drilling for two wells at the Galoc oil field in northwest Palawan.

“The drilling phase of the Galoc 5H and 6H development wells has been successfully completed,” Otto Energy said in a disclosure to the Australian Stock Exchange.

“This marks the successful conclusion of the major drilling activities of the Phase 2 project with remaining drilling rig-based operations being for well completions and installation of subsea trees,” it added.

A subsea tree monitors and controls the production of a subsea well.

With the completion of drilling activities, Otto Energy said the company is on track with its plan to extract first oil from the two wells in November this year.

“Delivery of subsea equipment and mobilization of installation vessels are all on schedule to allow final tie-in work to be completed consistent with planned first oil from the Galoc 5H and Galoc 6H wells in November 2013,” Otto Energy said.

The Galoc joint venture partners approved last year the Phase 2 development and commenced drilling in June 2013.

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

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

The Galoc field consortium was earlier 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 Phase 2 project is $188 million, of which Otto’s share is $62 million representing its 33 percent interest.

The Phase 2 development 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.