Chinese company, DOE join forces for Alegria gas and oil venture

By on June 20, 2018

By Marcelle P. Villegas

In March, the Alegria natural gas and oil field in southern Cebu became the latest big thing in the country’s search for possible solution to the energy crisis when Department of Energy (DOE) formally declared that is has commercial quantities of natural gas and oil resources. [1]

Since early 2016, DOE stated 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.” [2]

Based on their findings, about 9.42 billion cubic feet of natural gas reserves were found (with recoverable resource estimated at 6.6 BCF, or 70% of total natural gas in place).

For oil reserves, it is estimated to generate 27.93 million barrels. However, it is possible that the production recovery rate may be as low as 3.3 million barrels of oil (or 12% of total oil in place). [2] The DOE reported that the petroleum yield at the Alegria field may last for the next 20 years or until 2037, an estimated outcome from the initial testing at the block.

Due to these potentials from the new discovery, DOE and service contractor China International Mining Petroleum Company Ltd. (CIMP) had a signing of “joint declaration of commerciality” (JDC) last 14 March 2018. This declaration was signed by Energy Secretary Alfonso G. Cusi and CIMP Co. Ltd Chairman Lam Nam. Also present during the signing was Energy Undersecretary Donato D. Marcos and CIMP Co. Ltd. CEO Eric Lai.

CIMP is a Chinese firm and subsidiary of Hong Kong-based Polyard Petroleum International Group. The company holds Petroleum Service Contract 49 which covers the Alegria Oil Field.

The JDC outlines the roles and responsibilities of CIMP Co. Ltd. and its guidelines for compliance with all the conditions stated on its approved plan of development.

References:

[1] Lectura, L. (March 14, 2018). “DOE declares Alegria oil field in Southern Cebu as commercially viable.” Business Mirror. https://www.doe.gov.ph/energist/doedeclares- alegria-oil-field-southern-cebu-commercially-viable

[2] Velasco, M. (March 16, 2018). “Chinese firm finds commercial-scale oil, gas in Cebu petroleum block.” Manila Bulletin. https:// news.mb.com.ph/2018/03/16/chinese-firmfinds- commercial-scale-oil-gas-in-cebu-petroleum-block

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