Australian firm Otto Energy has commenced the second phase of drilling at the Galoc oil field in Northwest Palawan, the company said in a disclosure to the Australian Securities Exchange.

Otto Energy, which has mobilized the semi-sub-submersible drilling rig Ocean Patriot from Singapore said drilling is expected to take about 115 days including the flowing of the wells for cleanup.

The Galoc-5H and Galoc-6H will drillings are part of the Galoc Phase 2 development approved by the drilling consortium last year. The consortium expects first oil to flow in the fourth quarter of 2014.

Early this month, Otto Energy announced the entry of Kuwait Foreign Petroleum Exploration Co. (Kufpec) as partner in the Galoc project.

Otto Energy, which holds a 33-percent working interest in the project, said Kufpec assumed control of 26.84473 percent working interest in the joint venture project following its acquisition of Risco Energy Pte Ltd., the parent firm of Galoc Production Co.

The Galoc field consortium is eyeing first oil to flow from the drilling of two additional wells in Northwest Palawan by the first half, bringing total daily production to about 12,000 barrels per day.

Total investment cost for the Galoc Phase 2 project is $188 million of which Otto’s share is $62 million representing its 33-percent interest.

The Phase 2 development, which has the support of the joint venture, will require the drilling of two subsea wells, tied back to the existing floating production, storage and offloading facility.

Other partners in the project are Nido Production Ltd., Oriental Petroleum & Minerals Corp., Linapacan Oil Gas & Power Corp., the Philodrill Corp. and Forum Energy Philippines.