Production tests are ongoing at the Alegria oil field in southern Cebu ahead of commercial production, the Energy Department said over the weekend.
“Production testing is ongoing. If the flow is already stable, then actual production will succeed,” said Energy Secretary Alfonso Cusi, who was informed about the latest developments in the country’s first land-based oil field.
Cusi said during the production testing stage that equipment requirements would be procured as part part of the development plan approved by the department.
“Projected production level is 400 barrels per day for two production wells. There is a plan this year to drill for three more wells,” said Cusi.
China International Mining Petroleum Co. Ltd., the project proponent, already signed a one-year sales and purchase agreement with Tom’s Power Petroleum Distributor Inc.
TPPDI is a trading company incorporated in the Philippines that engages in the sales of petroleum products. CIMP will sell crude oil to TPPDI according to the increasing production quantity, but actual quantity would be determined upon loading.
“It’s small [oil field] but [it] will help Visayas and Cebu,” Cusi said.
CIMP holds Petroleum Service Contract No. 49 which covers the Alegria oil field, an onshore site in the fourth-class town of Alegria in the southern part of Cebu province.
CIMP, a subsidiary of Polyard Petroleum International Group, acquired an 80-percent stake in the participating interest of the SC 49 project and became its operator in July 2009. The contract covers a 25-year production period.
Alena Mae S. Flores
Cusi earlier said the Alegria oil field could power up to 60 megawatts of natural gas-fired power plant and produce up to 360 barrels of oil per day.
“There are two wells that already produced 180 barrels per day. They are ready so we are just scheduling when will be the first delivery, first output,” Cusi said.
He said while the oil flow was minimal compared with the country’s fuel requirements, the Alegria oil discovery would “help the local economy because it will support the local industry, cement factories and local factories using crude oil for fuel.”
“That will be a big help even if it’s small at 360 bpd but a positive development for our exploration. This is onshore and I understand there were attempts for the past 100 years but it is only now that we have this kind of development,” Cusi said.
Cusi said CIMP was readying oil production and preparing to put up a natural gas plant.
Cusi said the government would allow CMIP to recover first its cost equivalent of 90 percent of the production, with the balance to be shared by the government (60 percent) and CMIP (40 percent).
Cusi also wants other oil and gas exploration projects to move forward.
“We are preparing to make a campaign to do some road work to promote exploration,” he said.