Philippines' Galoc oilfield yet to come on stream

SINGAPORE, July 14 (Reuters) - The Philippines' Galoc oilfield has faced yet another setback and first oil is now likely only in August, against a initial startup planned for the first quarter, equity holder Otto Energy said on Monday.

The Floating Production Storage and Offloading system (FPSO) that is to extract 17,500 barrels per day from the offshore field has yet to be reconnected due to damage in one section of the riser, Otto Energy (OEL.AX) told the Australian Stock Exchange.

The Galoc field has great significance, not only for the Philippines, whose meagre output it will hike by some 70 percent to slightly more than 40,000 bpd, but also for Otto Energy and Nido Petroleum (NDO.AX), two small independent Australian companies that have bet on the underexplored Philippines.

Otto shares fell to A$0.390 by 0223 GMT, down 3.66 percent, and off the record high of A$0.525 touched in May, while Nido shares fell 3.57 percent to A$0.405, off a high of A$0.64 also hit in May.

Both companies underperformed the wider Australian market .AXJO on Monday, which was down 0.28 percent by 0224 GMT.

The FPSO was disconnected on June 20 ahead of the passage of Typhoon Fengshen, which wreaked havoc in central and southern Philippines.

A new section of the riser is being brought from Singapore and is expected to arrive this week, the company said.

"Otto will provide an update as to the anticipated timing for first oil once additional information is provided by GPC and Rubicon, however initial indications are it will now probably be during August," the statement said.

This is the latest in a series of delays that have seen the field's startup repeatedly postponed.

Oilfields' startup dates are prone to repetitive slips while the infrastructure needed to extract and transport the oil is put in place.

Galoc will be Otto Energy's first oilfield to come onstream.

Otto Energy holds an 18.3 percent indirect interest in the field via a 31.38 stake in operator Galoc Production Company (GPC), with European trader Vitol holding the remaining 68.62 percent.

GPC operates the Galoc field with a 58.29 percent interest.

The remaining 41.71 percent is split between Nido Petroleum, with a 22.28 percent share, and several Philippine partners.

Vitol, and European trader Trafigura, will be the two main marketers of the light crude, which has a higher sulphur content than most other Asia-Pacific crudes at 1.64 percent.

Galoc comes as a relief for the Philippines, which is trying to cut its annual fuel import bill and is reeling from soaring fuel and food costs which have pushed annual domestic inflation to record highs.

Energy Secretary Angelo Reyes said this would translate to $1.4 billion in foreign exchange savings for the country from the start of commercial production until the life of the well ends. (Reporting by Maryelle Demongeot; Editing by Michael Urquhart)