Australia’s BHP Billiton has bailed out of an operated exploration license offshore the Philippines, to the surprise of its minority partner Otto Energy.

The company issued notice of its planned withdrawal from Service Contract 55, which contains the deepwater Cinco prospect on which a well was planned to be drilled this year but which BHP says it will now not participate in.
In return Australian independent Otto says it will “enforce full legal rights under the relevant agreements”. Otto said BHPB had advised that it had decided not to participate in the drilling of the Cinco-1 prospect and to withdraw from the licence. “BHPB had provided no previous indication to Otto of its intent not to participate in the Cinco-1 prospect or to withdraw from the SC55 licence,” it added.

The independent said it was taking legal advice on BHPB’s continuing obligations to fund Otto’s working interest through the current sub-phase of the licence.

The Philippine Department of Energy (DOE) has not as yet issued a notice following the recent approach by BHPB to the DOE regarding the revised timing of the work programme commitments outlined last month.

Offshore