"I played well from the beginning to the end," Otaegui said. "I made a couple of mistakes but was able to make pars. Those five birdies in a row helped me a lot.
"I think I have been very consistent all week. I am striking the ball well and feeling well so I am happy with that."
Wallace, who was ahead for much of the round, dropped a shot at the 17th and had to settle for 69 and a share of the lead.
"I had a chance at par at 17 and missed it and then it was just a bad tee shot down the last," Wallace said.
"Again it was frustrating but I'm playing really good golf so there's not much else I can do."
Sweden's Alexander Bjork, France's Julien Guerrier and Spain's Jorge Campillo, who are all chasing a maiden victory on the European Tour, were in joint second place.
(Reporting by Shrivathsa Sridhar in Bengaluru; editing by Ken Ferris)
