Otto Energy Approx 2.1 Billion barrels of oil for 6 wells to be drill in the Philippines' oil field

Australian firm Otto Energy Ltd. targets to drill as many as six exploration wells within three Philippine petroleum service contracts between now and 2015 to produce an approximately 2.1 Billion barrels of oil, noting that the Philippines is being deemed as a “core focus area for growth” of the company.

As of March 2009, the Otto Energy has successfully produced their first million barrels of oil in the oil field near Palawan.

In a report, Otto Energy bared its Palawan and Visayas exploration and development plans over the next four to five years, which would involve the drilling of two deepwater wells within Service Contract 55 off Palawan, anytime from August 2011 to August 2013.

These drilling activities will help the company tap significant oil and gas prospects within SC 55, reported to contain an estimated 1.8 trillion cubic feet of gas and 567 million barrels of oil. The company identified “Cinco” as lead drilling candidate for this service contract.

Two more exploration wells were targeted to be drilled within SC 51 (Visayan Basin), between late 2012 and mid-2014. Earlier this year, Otto Energy drilled an onshore exploration well, Duhat 1, but failed to penetrate the rock formations below 250 meters of depth.

But aside from the Duhat prospect, the 332,000-hectare SC 51 houses the Argao and Bahay prospects, among nine other leads, which were all estimated to hold a combined 263 million barrels of oil.

Drilling of the mature Argao prospect alone may yield at least 100 million barrels in recoverable oil to the company. Based on the company’s previous studies, part of the Argao prospect may even have eight levels, each containing up to 300 million barrels of oil.

Otto Energy further disclosed that another two wells would be likely drilled within SC 69 from 2013 to early 2015. The recently completed 3D seismic survey over the Camotes Sea will soon allow the SC 69 consortium to identify “drillable prospects” and tap prospective structures there, estimated to contain over 700 million barrels of oil.

SC 69 currently covers an area of 5,280 square kilometers in the central Visayan Basin where the data acquired from the successful 2D seismic campaign last year confirmed the presence of two sizeable reef structures.

These structures, the Lampos and Lampos South, sit immediately adjacent to the Calamangan Trough, which was said to generate both oil and gas. Current “success case” estimates of oil initially in place in the combined structures range between 22 million and 713 million barrels, with a mean in place volume of 290 million barrels.

The Lampos and Lampos South prospects were said to indicate seismic character consistent with the development of carbonate reef complexes analogues to those that host the Malampaya oil and gas field.

The $4.5-billion Malampaya power project is currently the Philippines’ largest gas development and provides around 40 percent of the power requirements of Luzon, roughly equivalent to 2,700 megawatts.

The best factor for oil and gas mining in the Philippines is when you fail to produce oil, there are tons of natural gas to come out.

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Benham Rise of 13 Million Hectares to be the New Philippines Territory

Benham Rise - the Natural Gas & Solid Methane Treasure Rich Undersea New Philippines Territory

The Philippines will gain 13 million hectares in additional territory, an area slightly smaller than Luzon, should the United Nations approve next year (2012) the government's claim on a region off the coast of Isabela and Aurora, Environment Secretary Ramon Jesus Paje said on Monday (August 15, 2011).

Benham Rise was found off the coast of Aurora province, Northeastern part of Luzon Island  and is part of the Philippine continental shelf and its 200 Nautical Mile Exclusive Economic Zone. With just the Pacific Ocean to the east, Hawaii is probably the next closest island.

Benham Rise, also known as Benham Plateau, is a 13-million hectare undersea region east of Luzon. It is enclosed by the coordinates 119°30'E to 132°00'E and 12°10'N to 20°30'N latitude.

The plateau is a massive formation of basalt, a common volcanic rock, and is described in a study as a thickened portion of the Philippine Sea plate's oceanic crust.

Another research notes the similarity of the shape of Benham Rise to the sharp bend of the Luzon coastline, which suggests the sea floor's resistance to subduction (the process by which one plate on the earth's crust is pushed downward beneath another plate because of collision) that may have affected the Philippine fault.

The formation lies within the continental shelf of the Philippines as defined by the 1982 UN Convention on the Law of the Sea (UNCLOS).

Under the UNCLOS, a coastal state's exclusive economic zone extends 370 kilometers (200 nautical miles) from its continental shelf, while its extended continental shelf extends for another 278 km (150 nautical miles).

Paje said the undersea region, called Benham Rise, could turn the Philippines into a natural gas exporter because of the area's huge methane deposits.

Studies conducted by the Department of Environment and Natural Resources (DENR) for the past five years indicate large deposits of methane in solid form, Paje said after a Senate budget hearing.

The government is only awaiting a formal declaration from the UN Convention of the Law of the Sea (UNCLOS) that Benham Rise is on the country's continental shelf and therefore part of its territory, Paje said.

Philippines Legal basis of Expansion

Once the UNCLOS establishes that Benham Rise is part of the Philippines, "we would have legal basis to enter into exploration agreements with private companies to explore… (the area's) resources," said Sen. Franklin Drilon, chair of the chamber's finance committee.

Drilon said a favorable UNCLOSs declaration would mean "increasing the Philippines territory from present 30 million hectares to possibly 43 million hectares" with the inclusion of Benham Rise.

Discussion over Benham Rise generated excitement especially after Paje said that Philippine representatives were just awaiting one more meeting "to answer questions" before a special Unclos committee.

Philippines as a sole claimant

Paje said there was no reason for the UNCLOS committee not to issue a decision favorable to the country "since we are the only claimant, unlike in the western side (where the Spratly Islands are)."

"We have submitted a claim under (UNCLOS) sometime in late 2008. We got a reply from the UN lately (asking us) to answer some questions. They intend to pass a resolution sometime in mid-2012 to approve our claim (that it is) part of the Philippine continental shelf," Paje told reporters after the hearing.

Records showed that the Philippines officially submitted a claim with the UN Commission on the Limits of the Continental Shelf in New York on April 8, 2009.

Davide submission

Hilario Davide, then Philippine ambassador to the United Nations, filed the country's partial submission with the commission.

The United Nations says the continental shelf is "the seabed and subsoil of the submarine areas that extend beyond its territorial sea" up to 370 km (200 nautical miles) from the archipelagic baseline. An extended continental shelf goes farther than 370 km.

The Philippines claims that Benham Rise is an extension of its continental shelf.

Paje said Benham Rise was within the country's 370-km exclusive economic zone.

American geologist

The environment secretary said an American geologist surnamed Benham discovered the area that was between 40 and 2,000 meters below the waterline in 1933.

"But we are able to define categorically that it is attached to our continental shelf only recently. We have proven (to) UNCLOS that it is attached. So now the UN is considering it for decision sometime in 2012," Paje said.

He said gas deposits in the area would enable the country to achieve energy sufficiency.

"Benham Rise is very relevant because of its gas deposits (which has been) confirmed particularly by (the) National Mapping Resource Information Agency. It has given us the data that (the area) contains solid methane. We have not explored it but we have found nodules of methane in the surface and this is very important to us," he said.

Kalayaan, Scarborough Shoal (Panatag Shoal)

The Kalayaan Island Group, which is part of the disputed Spratly Islands and Scarborough Shoal, both located in the West Philippines Sea (South China Sea) and claimed by the Philippines, are also believed to contain oil and natural gas.

Paje said there was the possibility that the country could export gas in the future.

The secretary added that there would be a demand for gas deposits in Benham Rise "because it's much cleaner than (other) fossil fuels."

The DENR formally submitted its proposed ₱16.99-Billion budget for 2012 to the Senate finance committee.

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