sc 55

Energy Secretary Carlos Jericho Petilla asked a consortium led by Otto Energy of Australia to start the development of the Cinco natural gas field in Palawan, despite the pullout of BHP Billiton Petroleum Corp.

BHP Billiton, the operator of Service Contract 55 located near the Malampaya gas field in northwest Palawan, decided not to participate in the drilling of the Cinco-1 prospect.

BHP Billiton, which owns a 60-percent stake in SC 55, announced last month it would not participate in the project. Trans-Asia Oil and Energy Development Corp. holds 6.82 percent and Otto Energy Ltd. has 33.18 percent.

“If Otto Energy does not find a drilling partner then I’ll just have to cancel it. Unless they ask for an extension because they are still interested to drill it then we will extend it. Otherwise, if there is no chance for them to drill it then might as well cancel the contract,” Petilla said.

Petilla said BHP Billiton decided not to pursue SC 55 due to financial constraints, after its budget was cut by 35 percent. “Not only in the Philippines but even in India they decided to cancel their participation in another contract. I think Otto Energy might file legal actions because BHP Billiton has contractual obligations,” he said.