The Alegria oil field in onshore southern Cebu can power up to 60 megawatts of natural gas-fired power plant and produce up to 360 barrels of oil per day, the Energy Department said over the weekend.
“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,” Energy Secretary Alfonso Cusi said over the weekend.
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,” the energy official said.
Cusi said the project proponent, China International Mining Petroleum Co. Ltd., was readying oil production and preparing to put up a natural gas plant.
“It’s small 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.
Cusi said the government would allow CMIP to recover first its cost equivalent to 90 percent of the production, with the balance to be shared by the government (60 percent) and CMIP (40 percent).
Cusi 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.
Cusi said the oil and gas industry had been plagued by several issues such as the unresolved Malampaya tax.
The oil and gas industry also ground to a halt amid the territorial dispute with China in the West Philippine Sea.
The department last week declared Alegria oil field with commercial quantities of natural gas and oil resources. Exploration and drilling activities on the oil field by the service contractor started in 2009.
“The DoE and CIMP jointly established that the oil field contained commercial quantities of natural gas upon its discovery of oil accumulation in the adjacent hydrocarbon traps within the Alegria underground area,” the department said in a statement.
CIMP discovered an estimated 27.93 million barrels of oil with a possible production recovery of 3.35 MMBO, or a conservative estimate of 12 percent of total oil in place/reserves.
