Alegria gas, oil extraction site ready for commercial operations

By Rosalie O. Abatayo |May 11,2018 - 11:11 PM

Chinese mining petroleum firm to inaugurate facilities on May 19

The 10-hectare oil and gas extraction site in Barangay Montpeller, Alegria town in southern Cebu will soon start commercial extraction operations especially with the inauguration of the Chinese company’s facility set on May 19.

Acting Director Saul Gonzales, Department of Energy Visayas field officer (DOE VFO), said in a press briefing on Friday, that after pouring about $6.5 million into the exploration, drilling and gas testing in the area, China International Mining Petroleum Company Limited (CIMP) would now proceed with its commercial extraction of the area’s resource.

Clarification

Aside from that, Gonzales also clarified his statements in previous reports pertaining to the temporary suspension of the operations in the site pending documentary requirements.

He said that upon inspection of DOE head office personnel on the last week of April, DOE only advised CIMP to improve one of the six oil wells because of some impurities present in the well and for the firm to acquire better storage equipment for the extracted materials.

“(They were) Advised to stop extraction lang on one well to clean, but the operation in the site was not suspended by DOE,” said Gonzales.

He also said that CIMP’s activities had already been issued with an Environmental Compliance Certificate (ECC) and Environmental Impact Assessment (EIA) since June 2015.
Director William Cuñado, Environmental Management Bureau in Central Visayas (EMB-7) regional director, confirmed in a separate phone interview that the bureau had already issued an ECC to CIMP.

CIMP holds Petroleum Service Contract (SC) No. 49 from the DOE, which covers the Alegria oil field.

“We’ve already issued them the ECC long ago for the exploration and commercial purposes,” Cuñado said.
Cuñado, however, clarified that the ECC that they had issued, would not permit the investor to process the oil that they would extract, whenever their commercial operation would start.

“If they will process it, that’s another story. They have to apply for that. But if they will dispose it raw, then that’s already covered with the ECC that they have,” he said.

He said that whoever would process the raw oil extracted from Alegria, would also need to secure a permit from the EMB.

He also said that the investor would also need to apply for an ECC, if it planned to construct a refinery and a power plant there.

The construction of the power plant is an option, for them to process natural gas in order to produce energy.
Cuñado said that it would be up to the DOE to monitor CIMP, especially for its disposal.

Benefits

Among the benefits of the project is that the Philippine government and Alegria town and Barangay Montpeller will all get a share of the extraction profit.

The Petroleum Service Contract entered into by CIMP and the DOE mandates a 60-40 partition of the extraction profit between the Philippine government and the consortium, respectively.

Of the 60 percent part of the government, 60 percent will go to the national treasury, 8 percent will be allocated for the province, 18 percent will be for the municipality while 14 percent will be given to Barangay Montpeller.

On top of the monetary benefits, DOE’s Gonzales also said that the project would invite more businesses to come into the town and to generate more job opportunities.

During the explorations conducted, an estimate of 27.93 million barrels of oil with a maximum possible production recovery of 3.35 million barrels or 12 percent of the total amount of oil were found in the area.

About 9.42 billion cubic feet (bcf) of natural gas reserves were also found in the site. Of which about 70 percent or 6.6 bcf is expected to be recoverable.

Breakthrough project

Jesus Rey Cavalida, Municipal Planning and Development coordinator of Alegria, for his part, said that although they had yet to receive communications from CIMP regarding the inauguration of the extraction site, they would be expecting the project to be a breakthrough for the town.

Cavalida said that the job openings that it would bring would benefit their constituents and eventually improve their economic status.

At present, Alegria is still considered as a fourth class municipality in Cebu.

“In the long run , the percentage [of the profit] share of the local government will really help the municipality. The workforce will also be coming from our residents, with priority for the people of Montpeller,” said Cavalida.

However, Cavalida said that before CIMP would go full swing in the project, they would have to meet with the barangay officials, and possibly with the constituents of the area, to make them aware of the ongoing project in the area.

He said that this had been their common process whenever there would be developments in any of the barangays to accommodate the concerns of the constituents.

Cavalida said that they had to meet with CIMP around the fourth week of April to discuss the environmental issues that the project would entail.

He said that so far, there had not been any opposition against the project other than environmental concerns.

Cavalida said that the site is located in a slightly elevated area, but it is still near the coast.

Gonzales, however, assured that the project would have to observe the proper easements as mandated by environmental policies. /with Correspondent Futch Anthony Inso

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