PRETORIA, 13 Mar 2015 (AFP) - The 22-year-old made nine birdies, including five in a row from the eighth, and his lone blemish was a bogey five at the final hole.
He completed his round long before the second round was temporarily halted by stormy, late-afternoon weather.
Otaegui, who opened with a 67 Thursday to trail the pacesetters by four shots, tops the Pretoria Country Club leaderboard on 11-under 129.
He is two shots ahead of South African Merrick Bremner, who carded a second-round 66.
South Africans Trevor Fisher Jnr (66) and Keith Horne (67), Englishman David Horsey (69) and Italian Edoardo Molinari (66) are on 132.
The Spaniard, seeking his maiden European Tour triumph, birdied two, three, eight and nine on the outward nine.
More birdies followed at 10, 11, 12, 14 and 16 and he came tantalisingly close to another at 17 before completing his round with a bogey five.
Otaegui, ranked 403rd in the world and a professional since 2011, confessed to being unaware he was scoring so well.
"I was playing well and sinking putts -- that is all I was thinking about. I did not realise I made five consecutive birdies.
"My best golf comes when I think as little as possible. This was one of those rounds."
Otaegui was unperturbed by the bogey finish.
"It is a tough par four and normally a par five," he said.
Second-ranked Bremner, another golfer hunting a first European Tour title, experienced mixed fortunes with seven birdies and three bogeys.
Defending champion Englishman Ross Fisher (67) and South African Dawie van der Walt (69), winner of the maiden Tshwane Open in 2013, are seven strokes behind Otaegui.
Europe 2016 Ryder Cup captain Darren Clarke from Northern Ireland fired a 67, a four-shot improvement on his opening round, to be nine shots off the pace.
Leading Tshwane Open second-round scores Friday at the par-70, 6,458-metre (7,063-yard) Pretoria Country Club (RSA unless noted):
129 - Adrian Otaegui (ESP) 67-62
131 - Merrick Bremner 65-66
132 - Trevor Fisher jnr, 66-66, Keith Horne 65-67, David Horsey (ENG) 63-69, Edoardo Molinari (ITA) 66-66
133 - Dean Burmester 65-68, Wallie Coetsee 64-69, George Coetzee 67-66
134 - Brett Rumford (AUS) 64-70, Ricardo Santos (POR) 66-68, Toby Tree (ENG) 71-63
135 - Raphael Jacquelin (FRA) 65-70, Craig Lee (SCO) 67-68, Morten Orum Madsen (DEN) 63-72, Erik van Rooyen 66-69, Ockie Strydom 66-69