MANILA, Philippines—Australian firm Otto Energy Ltd. has bagged the contract to explore and develop prospective oil and gas blocks off the Mindoro Cuyo basin, where it plans to invest an initial $500,000 in the first 18-month period.
In a regulatory filing, Otto Energy reported that it was named by the Philippine Department of Energy as the preferred bidder for Area 7 under the fourth Philippine Energy Contracting Round (PECR), which was launched back in 2011.
The formal turnover of the block for exploration and development will take place once Otto Energy signs the final petroleum service contract and submits supporting documentation to the DOE. Upon execution, Otto will commit to reprocessing the existing seismic study with a minimum financial commitment of $500,000 over a period of 18 months.
“I look forward to successfully executing the final Service Contract documents for Area 7. The addition of this new exploration acreage is consistent with our strategy to build an integrated exploration, development and production company focused on Southeast Asia and East Africa,” said Otto chief executive officer Gregor McNab.
“Area 7 has the potential to restock our existing, high impact, exploration prospect inventory that is already feeding our active drilling program through the rest of 2013.”
The bid of Otto Energy for Area 7 was coursed through the company’s local unit, NorAsian Energy Philippines Inc.
Area 7 is an offshore block located at the southern part of the Mindoro Basin–Cuyo Platform, a continental rift basin. It covers around 8,440 square kilometers with depths ranging from 100 meters to 1,300 meters.
According to Otto Energy, there is an existing 2D seismic data set of over 3,000 kilometers covering the block. The petroleum play types identified in Area 7 are reef build-ups, fault blocks and anticlines.
Oil has been discovered with an Extended Production Test conducted in 1994 at the Maniguin wells near the block. The occurrence of oil seepage in the Mindoro region also confirms the presence of an active petroleum system in the area, it added.
The awarding of the service contracts under the PECR 4 is a step toward boosting exploration activities in an underexplored country like the Philippines. Data from the DOE showed that the Philippines has a total potential resource of 8.6 billion barrels of oil equivalent; 3.27 billion barrels of oil; 28.5 trillion cubic feet of gas; and 164 million barrels of condensate.
The PECR 4 was envisioned to address the security of the country’s energy supply through the exploration of local indigenous resources. Harnessing local resources is expected to help the country meet its daily demand and reduce the importation of petroleum and petroleum products.
More importantly, developing the country’s own resources is deemed to be a long-term plan of action that will reduce the country’s dependence on imported petroleum and mitigate the effects of oil price volatility.—Amy R. Remo