Duterte opens Alegria oil fields today for commercial production

ALEGRIA, CEBU – President Rodrigo Roa Duterte opens today the ceremonial valve of the Polyard-3 Well site as a ceremonial commencement of oil and gas production of the Alegria oil fields at Barangay Montpeller, Alegria town south of Cebu.

Department of Energy (DOE-7) OIC-Regional Director Engr. Saul Gonzales in an interview with Manila Bulletin said Alegria town is an oil field of natural gas and crude petroleum deposits with commercial quantities whose production can last until 2037.

Gonzales added the oil field has a total production area of 42,749 hectares.

Gonzales said the Alegria oil fields have 9.42 billion cubic feet of natural gas reserves with a potential of 70 percent for extraction, or an estimated 6.6 billion cu/ft of recoverable resource for commercial use.

The crude petroleum, on the other hand, has an estimated 27.93 million barrels of oil (MMBO) with a possible production recovery of 3.35 MMBO ,or a conservative estimate of 12 percent of total oil in place/reserves, Gonzales added.

According to Gonzales, DOE Secretary Alfonso Cusi and China International Mining Petroleum Company Limited (CIMP Co..Ltd) chair Lam Nam signed the joint declaration of commerciality on March 14, 2018, in Taguig City, formalizing the service contract of CIMP Co. Ltd which covers the Alegria oil field.

Gonzales said the exploration and drilling activities of CIMP Co. Ltd. on the oil field started in 2009. In 2016, 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.

Engr. Dennis Guardiario, site engineer for the East Asia drilling contractor, said the third, fourth and fifth wells in Alegria may produce 300 to 400 barrels of crude oil daily. The sixth well is still being tested.

Gonzales said the crude oil and gas in commercial quantity will spur economic growth in Alegria and the whole Cebu province, even in the country.

According to Gonzales CIMP Co. Ltd has now the option to sell or to produce power/electric for domestic use by connecting to the distribution grid of CEBECO or to the transmission grid of the National Grid Corporation of the Phil. (NGCP).

When the CIMP Co. Ltd shall have produced the power and based on PD 87 known as the Oil Exploration and Development Act of 1972 the Philippine Government gets 60% share from the net sales of the project while 40% goes to CIMP Co Ltd.

From the 60 percent government share, 60% goes to the national, 8% share to Cebu Province, 18% to Alegria town and 14% to the host Barangay Montpeller.