Gas and Oil Explorations in Cebu: 5 Things You Need to Know

With the population of the Philippines reaching more than 100 million in 2017, there is no doubt that energy consumption is also steadily rising. According to global analyst Harshavardhan Reddy Nagatham, the country’s fast-growing population is one of the main drivers of energy consumption. And with no immediate solution in sight, the Philippines could very well experience once again unwanted brownouts which can have devastating effects on the economy.

Fitch Solutions Macro Research also noted that the oil dependency of the Philippines hovers at around 48%. This is significantly high considering how our current energy sources and reserves are declining.

Analysts are one in saying that for the Philippines to achieve energy independence and security, the country must do more explorations and tap into its rich indigenous resources.

Fortunately, despite issues that may hinder these developments from moving forward, the country’s efforts to keep possible explorations open continue to attract interest from those who may want to possibly invest.

In a statement, the Department of Energy said that it had received numerous requests for the right to explore for petroleum reserves in various parts of the country like Quezon, Albay, Mindoro, Palawan, Sulu Sea, and our very own Cebu.

Commercial Quantities of Natural Gas and Oil Resources in Alegria

In 2018, the Department of Energy revealed that Alegria, a fourth-class municipality located more than 100 kilometers from Cebu City, contained commercial quantities of natural gas.

Situated in Barangay Montpeller, the onshore oil field covers 197,000 hectares, with the production area covering around 42,749 hectares. Based on estimates, the oil field has 27.93 million barrels of oil with a possible production recovery of 3.35 million barrels. The field also has around 9.42 billion cubic feet (bcf) of natural gas reserves, with the recoverable resource estimated at about 70 percent of the total natural gas reserves or 6.6 bcf. The field can produce around 360 barrels per day and can last for about 19 years.

FILE PHOTO: The Municipality of Alegria

Boost in the Local Economy

The start of production of the onshore gas and oil mining site in Alegria has brought about a lot of changes in the sleepy Southwestern town.

Alegria Mayor Verna Magallon, who welcomed the development with open arms, said that this is an opportunity for the town to stop relying solely on its main sources of income. The local government unit stands to benefit from the sales of crude oil as they will be receiving part of the operators’ total sales.

She added that the exploration and production efforts will help improve economic activities within the municipality and generate new jobs. She is also hoping that this undertaking will help improve social services and implement some, if not all, of the town’s existing projects.

Looking for Oil and Gas Up North

After the success of the gas and oil explorations in the South, the DOE recently announced that it is also focusing on other parts of the province.

According to Energy Resource Development Bureau (ERDB) Director Jesus Tamang, Forum Exploration Inc. (FEI) is now doing both offshore and onshore drilling in the North – the Maya oil project in Daanbantayan and the Libertad gas project in Bogo City.

With the abundance of oil and gas reserves in Alegria, the Department of Energy is hoping that the northern towns would also yield good results.

FILE PHOTO: The Municipality of Daanbantayan

A Possible Solution to Energy Independence and Security

The natural gas and oil from the different oil fields in Cebu can be processed to produce different ready-to-use petroleum products. By constructing refineries and power plants, the produce will be transformed into useful items like liquefied petroleum gas or LPG, kerosene, gasoline, and road asphalt, to name a few.

To be able to do this, however, the companies involved in the exploration and extraction would have to go through several processes, including securing an environmental compliance certificate and an environmental impact assessment study from the DENR. After these, they would then have to secure various permits to properly transport, store, and refine their products.

The DOE added that the adoption of industry standards and practices is necessary to put the Philippines in the world map as a competitive oil and gas investment destination, and, eventually, as an energy-independent country.

FILE PHOTO: The City of Bogo

Beneficial to the Whole Archipelago

Energy Secretary Cusi said that the onshore oil discovery and production in Cebu is important to the energy security and sustainability of the whole country.

He pointed out that although the oil field currently has a small production, it could already serve the needs of the host community and its communes. He added that the gas produced each day is enough to power a 3.5 to 5-megawatt power plant, which in turn, can help run factories.

More importantly, the oil and gas fields will contribute to the national treasury through the 60-40 revenue-sharing deal under Presidential Decree No. 87.

The discovery and eventual utilization of these oil fields in Cebu are but small steps in the grand scheme of things. But they are a good start to something bright and wonderful. With a couple more explorations, and with everyone’s help, the Philippines’s goal of becoming secure and independent energy-wise, just might happen sooner than expected.

Sources: 1, 2, 3, 4, 5, 6, 7

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