BHP Pulls Out from Philippines Gas Prospect
Otto Energy informed Thursday that BHP Billiton, the operator of Service Contract 55 (SC55) offshore the Philippines, has decided not to participate in the drilling of the Cinco-1 prospect and to withdraw from the SC55 license.
BHP had provided no previous indication to Otto of its intent not to participate in the Cinco-1 prospect or to withdraw from the SC55 license, Otto said in a statement.
Otto has yet to receive any written notification from BHP or detailed substantiation for the basis of its decision. “Otto is taking legal advice on BHPB's continuing obligations to fund Otto’s working interest through the current Sub-Phase."
The company said that it will strenuously enforce its full legal rights under the relevant agreements and seek to protect the interest of Otto and its shareholders in relation to Otto's interest in SC55.
SC55 is located in the southwest Palawan Basin and covers an area of 9,880 km2. It is a deepwater block in the middle of a proven regional oil and gas fairway that extends from the productive Borneo offshore region in the southwest to the offshore Philippine production assets northwest of Palawan.
In May 2011, BHP BIlliton announced the exercise of an option to farm-in to SC55.
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