Malampaya gas operator Shell Philippines Exploration B.V. is keenly watching the exploration of the nearby Hawkeye prospect in the service contract of Otto Energy Ltd. of Australia, an official said over the weekend.
Spex managing director Sebastian Quinones said Otto and its joint venture partners were pushing through with the planned drilling this year.
Quinones said Spex had no ongoing talks with Otto for any joint venture opportunities in SC 55 pending the confirmation of the oil or gas reserves.
“Do we want to to buy in? They want to drill on their own at this point and take the risk,” he said.
“We’re hoping that it could be the next Malampaya. If drilling is a success, then we can have discussions,” he added.
Spex, holds a 45-percent stake in service contract 38, or the Malampaya gas field in northwest Palawan. Chevron LLC owns another 45 percent while PNOC Exploration Corp. holds 10 percent.
Natural gas from the Malampaya gas field is expected to last until 2024 until a new gas discovery is made.
Otto Energy earlier executed a binding contract with Maersk Drilling for the Hawkeye-1 drilling exploration scheduled in July to August this year.
“Final preparations for the drilling of the Hawkeye-1 exploration well are considerably advanced. This is a very exciting time for Otto as we undertake this important and potentially high impact, drilling event on behalf of the Philippines Department of Energy and our joint venture partners,” Otto chief executive Matthew Allen earlier said.
“With a significant free carried interest, Hawkeye-1’s success would be transformational for Otto,” he said.
Otto estimated the reserves of the Hawkeye prospect at 112 million barrels of oil, or 74 million barrels of oil net to Otto.
The company said the success of the Hawkeye drilling would unlock a significant new hydrocarbon play in the deep water southern Palawan region.
The Maersk Venturer drillship is one of the most modern and advanced in the world. Otto is set to mobilize the drilling rig to the location from July 17 to August 2015.
The Hawkeye exploration well has been designed to reach the top of target reservoir approximately 1,000 meters below the sea bed floor and intersect the gas oil contact to prove the presence of the oil leg.
“The well is expected to take around 23 days to drill from rig arrival until release. The majority of services have been contracted and total expected cost remains within guidance of $30 to $35 million,” the company said,
Otto said if the the well encountered hydrocarbons, more detailed evaluation, including well logging, would be undertaken and increase the overall cost by around $2 million to $3 million.
Otto owns 73.18 percent of service contract 55, while Red Emperor Resources NL holds 15 percent. Palawan 55 Exploration & Production Co. owns 6.82 percent.
PNOC–Exploration expressed interest to farm in for a 15 percent interest. It is waiting for the required approvals from the Office of the President in order to close the transaction.
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