China International Mining Petroleum Co. Ltd., the operator of the Alegria oilfield in southern Cebu, is in talks with potential partners, including East Asia Oil Engineering Group, for the construction of a small oil refinery.
CIMP, a subsidiary of Polyard Petroleum International Group Ltd., said it started talks with potential partners last year and recently gave an option to East Asia Oil to invest in an on-site refinery which could process 800,000 barrels a year as part of its drilling agreement.
CIMP signed a turnkey drilling service agreement with East Asia Oil for six production wells.
“CIMP will offer land for the setup and assist the contractor in securing all relevant permits, clearances and approval from the national and regional administrative agencies, local government units for the construction and operation of the refinery,” Polyard Petroleum said in its report to the Stock Exchange of Hong Kong.
Potential partners earlier contacted CIMP to express their intention to build a small refinery with an annual output of 750,000 barrels in the well site and completed a feasibility assessment and preliminary plan.
“Further cooperation is under development,” Polyard Petroleum said.
The Philippines has two oil refineries, including Petron Corp.’s 180,000-barrel-per-day facility in Bataan province and Pilipinas Shell Petroleum Corp.’s 110,000-barrel-per-day plant in Batangas province.
The Alegria oil field, which is under Service Contract 49, is situated at the southern part of Cebu.
CIMP acquired an 80-percent participating interest in SC 49 and became the operator the bloc in July 2009.
Polyard Petroleum indirectly acquired 51 percent of CIMP’s issued capital in October 2012, and an additional 12 percent in April 2014, bringing the effective interest in the project to 50.4 percent after the latest acquisition.
Potential partners contacted CIMP in July 2019 to express their intention to build a small refinery with an annual output of 750,000 barrels in the wellsite and completed a feasibility assessment and preliminary plan. Further cooperation is under development.
Production and testing at the Alegria oilfield in onshore southern Cebu is ongoing and production is being readied, the Energy Department said over the weekend.
“Production testing is ongoing. If the flow is already stable, then actual production will succeed,” Energy Secretary Alfonso Cusi said, who was informed by the latest developments in the Alegria oilfield.
Cusi said that during the production testing stage, equipment requirements would be procured as part of the plan of development 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.
CIMP already signed a one-year sales and purchase agreement with Tom’s Power Petroleum Distributor Inc. for crude oil production.
TPPDI is a company incorporated under the laws of the Philippines and is a trading company which engages in the sales of petroleum products in the Philippines.
Cusi earlier said Alegria oilfield could power up to 60 megawatts of natural gas-fired power plant and produce up to 360 barrels of oil per day.
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.”