The consortium of Service Contract (SC) 55 could soon proceed to drill the Cinco-1 exploration well in offshore Palawan, following the issuance of the Palawan Council for Sustainable Development (PCSD) its much-awaited clearance.
SC 55 is led BHP Billiton that controls 60 percent , while Otto Energy and local partner Trans-Asia Oil and Energy Development Corp own the remaining 33.18 percent and 6.82 percent of the oil block, respectively.
"Otto Energy Ltd. has been notified that PCSD has approved the issuance of the strategic environmental plan clearance in relation to drilling of the Cinco-1 exploration well in SC 55," the Australian firm said.
The companies now await the formal written endorsement, which is now being finalized with other concerned parties, including PCSD, BHPB and the Department of Energy (DOE).
The Cinco prospect is located in a 9,000 square kilometer area in offshore Palawan under Service Contract (SC) 55.
Both BHP Billiton and Otto Energy are listed at the Australian stock exchange, while Trans-Asia is a Philippine-listed firm.
"This is a positive step in closing the final regulatory approvals required to progress drilling of the Cinco-1 exploration well. We look forward to finalizing these approvals and the commencement of drilling activities," Otto Chief Executive Officer Gregor McNab said.
Otto further said the SC 55 joint venture will seek confirmation from the DOE of the revised work program.
The consortium had to declare delay in the program, citing force majeure, brought about by the delay in receiving the clearance from PCSD. The clearance was expected to have been issued in September last year
SC 55, also known as the Cinco well, is situated near the Malampaya gas field, which has a potential resource of 2.2 trillion cubic feet (TCF) of gas compared with the Malampaya's proven reserves of 2.7 TCF.
The Malampaya's production fuels three major power plants that generate more than a third of the country's electricity supply. The field's output, however, is expected to dry up starting 2024.
Earlier, the DOE threatened to award the contract to other interested applicants if the consortium fails to comply with obligations by August.
With report from Business Mirror and Interaksyon News
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