Otto Energy, Billiton join forces for Marantao project

Australia’s Otto Energy Ltd. Has agreed in principle to farm out 60 percent of its interest in Service Contract (SC) 55, to the petroleum business division of BHP Billiton, the world’s largest mining company, the Department of Energy (DOE) said.  

The SC 55 structure is estimated to be about five times the size of Malampaya, with potential oil reserves in the area reading around one billion barrels.

The service contract also covers an area of 9,000 square kilometers and is the first ultra deepwater block awarded by the DOE.

The current seismic data acquisition is focused on the giant Marantao prospect, a carbonate build-up (reef) at least five times larger than the Malampaya reef structure, the Philippines’ largest oil and gas field. 

Marantao lies in 1,900 meters of water and is over 150 sq. km. in size at closure level with at least 500 meters of vertical relief.

“This development is one of the best examples of the Philippines being a prime location for investments. This strong showing of investor confidence in the country should give other investors the opportunity to discover other investment opportunities which are available to them,” Energy Secretary Angelo Reyes said.

He added this signifies the country’s drive to boost investments in the energy sector. “This year alone, we were able to complete the signing of five SCs for oil and gas exploration alone. This continuing partnership with private companies is a good indicator of future business opportunities.”

Alex Parks, CEO of Otto, said the company is “extremely pleased to have BHP Billiton as our joint venture partner, as they bring a wealth of expertise to the project.”

“This farm-out is in line with Otto’s exploration strategy in the Philippines, and BHP Billiton’s interest and involvement in this project is a strong endorsement of our belief in the petroleum potential of the Philippines,” he said.

Parks said BHP Billiton is one of the largest and most successful companies in the resources sector, and in the event of a discovery of either oil or gas, “we couldn’t hope for a better partner to operate such a development.”  

“We anticipate that the 3D seismic survey will be carried out and interpreted in 2009 with drilling to follow in 2010. Otto looks forward to a positive and mutually beneficial working relationship with BHP,” he said.

Otto acquired its 85-percent interest in SC 55 in 2006, through the purchase of NorAsian Energy Ltd.