Otto: Galoc field to stay beyond 2020

Galoc, the country’s only operating oil field, is expected to remain in production beyond 2020 despite a slight adjustment in its reserve estimates, according to operator Otto Energy Ltd.

In its annual update of Galoc reserves, Otto reported a slight decline in 1P reserves to 21.51 million barrels (January 2014 review) from 21.7 million barrels (January 2013 review). It also adjusted the 2P reserves estimate to 25.06 million barrels (January 2014) from 25.40 million barrels (January 2013). 1P and 2P refer to oil reserves with a chance of recovery of 90 percent and 50 percent, respectively.

Otto said the adjustments were “caused by a mixture of technical and economic factors,” including oil prices. Further details were unavailable as of press time.

The Australian company said that based on the Galoc Phase I and Phase II well configuration, Service Contract 14-C (Galoc sub-block) was expected to remain in production beyond 2020.

Production-wise, Otto said Galoc’s output had met expectations since the completion of the Phase II development in December 2013. Three cargoes have been lifted from the field since December 2013 with further lifting scheduled for the end of the first quarter this year.

“This performance is expected to continue,” Otto said.

A wholly owned subsidiary of Otto, Galoc Production Co. WLL, commissioned a yearly review of remaining oil reserves. Independent consulting firm RISC conducted the review.

“Galoc is a key asset for Otto, delivering valuable cashflow to fund future growth opportunities. Otto’s investment in Galoc Phase II in 2013 has delivered a substantial increase in production,” company CEO Matthew Allen said.

Otto’s involvement in this successful development demonstrated the organization’s strong project execution capabilities. The company continues to seek additional opportunities to expand the Galoc oil field with further in-fill drilling, Allen said.

Galoc has produced more than 11 million barrels of oil since it was commissioned in 2008. Ultimate recovery from the field, with the addition of Galoc-5H and 6H, is expected to reach 25 million barrels of oil.