‘DATO NA ANG ALEGRIA!’

President Rodrigo Duterte leads the ceremonial opening of the oil and gas production of the Alegria Oil field Polyard-3 Well in Barangay Montpeller, Alegria, Cebu, on Saturday, May 19, 2018.
CDN PHOTO/JUNJIE MENDOZA)

PROSPERITY AWAITS OIL-RICH TOWN

From a fourth-class municipality to a “rich” town with a monthly earning of about P82 million.

The southern Cebu town of Alegria with around 23,000 residents is expected to reap economic benefits with the commencement of commercial operations of the oil and gas field by China International Mining Petroleum Ltd. Co. (CIMP).

President Rodrigo Duterte himself led the ceremonial opening of the valve of one of the six well sites in the hinterland barangay of Montpeller.

In his speech, the President hailed the town, saying “dato na ang Alegria! (Alegria is now rich!)”

The President did not mention any amount when he spoke in Alegria. But in a separate speech at the opening ceremony of the Philippine National Games (PNG) at the Cebu City Sports Center, the President said the town will be earning a whopping P82 million a month as revenue share from CIMP’s operation.

The projected monthly oil earning of Alegria is just P10 million shy of the town’s annual income of P90 million, or even higher than the town’s annual internal revenue share of P75 million.

Arriving at 7:30 p.m., or two hours behind schedule for the PNG opening, the President deviated from his prepared speech and instead boasted on the prosperity that awaits Alegria:

“We should be thankful to God, pasalamat mong mga Cebuano naa tay exploration ug nag develop na ta ug gas ug oil diha sa Alegria. Mamalhin namo didto sa Alegria kay ilang bahin it’s about P82-million a month,” the President said.

(We should be thankful to God, Cebuanos should thank God that there is gas and oil in Alegria. Migrate to Alegria because its share is P82 million a month.)

The President said the prosperity experienced by oil-rich nations such as Indonesia, Malaysia and Brunei that propelled their industrialization could now likely happen in the Philippines.

“Kitang Filipino, murag karon lang ta na hinumduman sa Ginoo pud. Pabor pabor man sad nang iyaha. We are really grateful to God that nga naa tay oil, at least kamong mga Cebuano dili namo mag problema ug walay oil sa ubang nasud. That outfit sa Alegria nga akong gi ablihan, that symbolizes that we have the gas and oil inside. It would run for about 20 years ug magkinaunsa ang kalibutan, kamo naa jud moy supply sa gas ug oil kay hasta inyong electricity mobarato na.” he added.

(It seemed God has finally remembered us Filipinos. He bestows favor as He sees fit. We are really grateful to God that He finally gave us oil. At least you, Cebuanos, will no longer have a problem about scarcity of oil in other countries. That outfit in Alegria that we just opened, that symbolizes that we have the gas and oil inside. It would run for about 20 years and whatever happens in other parts of the world, you will have supply of gas and oil; and even the cost of your electricity will drop.)

Massive migration

“Prepare for massive migration. Ang tawo, basta asa ang kwarta, motapok na. Modaghan pud ang mga squatters, purya gaba lang (Where there’s money, people will flock. Squatters will also increase; God forbid). But accommodate them and let them partake of the bounties of what God has given us in the bowels of the earth,” he told a crowd in Alegria composed of local government officials, CIMP officials, and townspeople, among others.

“Plan your municipality well,” he added.

Duterte also urged local officials to spend their additional income for local projects, especially infrastructure projects and generating additional employment for locals. He said he expects the town to expand and it may even be feasible for the municipality to have its own airstrip.

The President, who was scheduled to arrive at 3 p.m., arrived at the venue at 5:26 p.m. His speech lasted for less than 30 minutes.

Local share

Alegria Mayor Verna Magallon said they are looking forward to the revenue share that the local government unit (GFU) will receive from CIMP’s commercial operations.

“Our expectation is that with this development, the economic activity of the town will increase since we will be having a share. We can deliver more basic services,” she told reporters during the program.

She said among their immediate plans for the additional revenue is to widen their water project to make sure that all their constituents have access to potable water.

Other plans include electrification, health care and free medicines, additional social pension for senior citizens and persons with disabilities (PWDs), and more infrastructure to support their thrust to promote organic farming, with their goal of becoming the “organic vegetable basket of Cebu.”

Under Presidential Decree 87 or the Oil Exploration and Development Act of 1971, the Philippine government will get a 60 percent share from the net sales of the project.

CIMP, the service contractor, will get a 40 percent share.

The 60 percent share of the government will be further divided as follows: 60 percent will go to the national government, 18 percent to the Alegria municipal government, 14 percent to the host Barangay Montpeller, and 8 percent to the Cebu provincial government.

Although there are still no estimated amount as to how much the LGU will be getting as share, Magallon is optimistic that it will make a significant contribution to their coffers.

Alegria, a fourth-class municipality in the southern part of Cebu, operates with a yearly budget of only around P90 million — P75 million from its internal revenue allotment (IRA) share and P15 million from local revenues.

Montpeller, on the other hand, is one of the town’s poorest barangays with only around 400 households. Their major livelihood is farming. It is one of five upland barangays in the town. The remaining four of the nine-barangay town are coastal villages.

The mayor said they were not expecting a lot of jobs to be generated from the commercial operations of CIMP as the work would involved mostly technical staff and experts.

But she hoped that more industries will consider their town as an investment destination to create a different set of jobs for locals.

Expansion

CIMP is also looking at expanding their oil and gas exploration in nearby areas of Alegria.

According to Edgar Benedict Cutiongco, assistant country manager and director of the CIMP Manila office, they planned to establish more wells andextend their exploration in the western side of their current area in Barangay Montpeller.

“We’re looking at extending our exploration in the western part of this area. There are signs that the reservoir extends over to the west side,” said Cutiongco, a geologist by profession.

Right now, the CIMP has finished testing five of their six wells. The last one is still undergoing tests.

In 2018 alone, the Chinese firm is programmed to drill three additional development wells in the area.

Energy Secretary Alfonso Cusi urged more investors in the oil and gas industry to develop more indigenous energy resources in the country.

Cusi was part of the president’s welcome party and accompanied Mr. Duterte during the ceremonial commencement of oil and gas production at the Alegria Field Polyard-3 (P3) wellsite yesterday.

“More oil exploration activities in the country will boost economic activities and generate jobs for our kababayans,” he said in a statement.

The six exploration wells in Barangay Montpeller results in the discovery of oil and gas resources with potential commercial quantities of 27.93 million barrels of oil and 9.42 billion cubic feet (BCF), respectively.

CIMP’s exploration and drilling operations is covered by Department of Energy (DOE) Service Contract (SC) 49. The Alegria Oil field covers a total area of 197,000 hectares, with about 42,749 hectares devote to the production area.

The CIMP partnered with Skywealth Group Holdings Limited and Phil-Mal Energy International, Inc. for the US$30.80 million invested in this project.

Commercial production

According to Cutiongco, it will still take a few months before they can go on full operation for their oil extraction, but they have already started selling crude oil in small amounts to local industries.

Although the projects benefits are “not significant” vis-a-vis the regional and national demand for oil, Cutiongco said the project, which is the first on-shore oil exploration project in the country that has yielded commercial viability, still has major advantages.

“We are consuming a lot more oil. But this is indigenous. So we don’t need to buy oil outside the country like Dubai or the Middle East. We pay top dollars for that,” he said.

Based on the West Texas Intermediate Crude Oil prices, Cutiongco said one barrel of crude oil costs US$78. One barrel is 149 liters. With the project, local petroleum companies no longer need to source crude oil from the world market.

CIMP started oil exploration in the Alegria Oil field in 2009. Since then they have drilled six wells. Under SC 49, they have a contract for a 25-year production period with possible extension of up to 15 years.

After the six wells, Cutiongco said they can build up to 10 to 15 more wells within their service area.

The current expected production is about 120 barrels a day. But once they are able to optimize their existing wells, Cutiongco said they can produce up to 1,000 to 2,000 barrels of oil a day. But in recent rates, it is still at around 120 barrels a day.

As for the gas produce in the field, he said they still have no buyers. But he said it can be used eventually for fire power plants.