BHP Billiton, Otto Thinking of Suspending SC55 (Philippines)

Otto Energy Ltd announces that it has received formal correspondence from BHP Billiton Petroleum (Philippines) Corporation  in its capacity as Operator, explaining that certain Philippines regulatory approvals necessary to fulfill the Service Contract 55 (SC55) work program have yet to be obtained.

Otto and the joint venture are in discussion regarding the impact of these events on the current August 2013 deadline. “Otto is continuing to actively engage BHPB regarding various options which include potentially temporarily suspending SC55, the joint operating agreement and farm-in agreement under force majeure,” Otto said in a press release.

BHP Billiton has reiterated that its objective remains to fulfil its contractual commitment to drill the Cinco well in SC55 at the earliest opportunity. BHPB has also advised that it has progressed activities to secure key services to drill the Cinco-1 well. These activities are well advanced but BHPB has advised that it cannot enter into binding agreements until all necessary regulatory approvals have been secured.