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 growing population is one of the main drivers of energy consumption. With no immediate solution in sight, the country could very well once again experience unwanted brownouts. This, in turn, can have crippling effects on the economy.




Fitch Solutions Macro Research noted that the oil dependency of the country is at around 48%. This is high considering how our current energy sources and reserves are dropping.

Analysts say that the Philippines needs to achieve energy independence and security. And to be able to do this, the country must tap into its rich natural resources.

There are many issues that prevent these developments from moving forward. However, the country’s efforts to keep possible plans open continue to attract interest from those who may want to possibly invest.

The Department of Energy has revealed that it had received requests for the right to explore for reserves in different parts of the country. Some of these spots include Quezon, Albay, Mindoro, Palawan, Sulu Sea, and our very own Cebu.

Commercial Levels of Gas and Oil Resources from Alegria Explorations

In 2018, the Department of Energy revealed that Alegria contained commercial levels of natural gas. The town of Alegria is a fourth-class municipality located more than 100 km from Cebu City.

Situated in Barangay Montpeller, the onshore oil field covers 197,000 hectares. It has a production area covering around 42,749 hectares. Based on estimates, the oil field has 27.93 million barrels of oil. It has a possible production recovery of 3.35 million barrels. Also, the field has around 9.42 billion cubic feet (bcf) of natural gas reserves. The recoverable resource is estimated at about 70 percent of the total natural gas reserves or 6.6 bcf. In short, 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 operation 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 welcomed the development with open arms. According to her, 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. The LGU will be receiving part of the operators’ total sales.

She added that the efforts will help improve economic activities within the municipality. The development is seen to generate new jobs and help improve social services. It is also expected to help implement some, if not all, of the town’s existing projects.

Oil and Gas Exploration in North Cebu

After the success of the gas and oil explorations in South Cebu, the DOE 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. This includes the Maya oil project in Daanbantayan and the Libertad gas project in Bogo City.

With the oil and gas reserves in Alegria, the DoE is hoping that the northern towns of Cebu would also yield good results in future explorations.

FILE PHOTO: The Municipality of Daanbantayan

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. Through refineries and power plants, the product will be transformed into useful items. These items include liquefied petroleum gas or LPG, kerosene, gasoline, and road asphalt, to name a few.

To do this, however, the companies doing the exploration would have to go through several processes. First, they need to secure an environmental compliance certificate. Next, they have to secure an environmental impact assessment study from the DENR. Then, they need to secure various permits to properly transport, store, and refine their products.

According to the DOE, the adoption of industry standards and practices is more than necessary. It will put the Philippines on the world map as a competitive oil and gas investment destination. Also, this could be the start of the country eventually becoming energy-independent.

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 country’s energy security.

He pointed out that the oil field currently has a small production. However, it could already serve the needs of the host community and surrounding areas. He added that the gas produced each day is enough to power a 3.5 to 5-megawatt power plant. This is enough to run factories and other industries.

More importantly, the fields will contribute to the national treasury. This can be done through the 60-40 revenue-sharing deal under Presidential Decree No. 87.

The discovery and use 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 gas and oil explorations in Cebu, the country’s goal of becoming independent energy-wise is not impossible. And this just might happen sooner than expected.

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

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  1. April 22, 2022

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