Aussie firm to drill 2 oil wells in Cebu

Australian energy firm Gas-to Grid (G2G) has committed to drill two oil wells in Cebu, a ranking energy official said.

Energy Undersecretary Guillermo Balce said G2G started last week its onshore oil exploration in the Malolos I well in Cebu.

"G2G has decided to reopen oil exploration activities in the Malolos I well in Alugunsan in Cebu. "They started drilling the well again last Dec. 7," he said.

The Malolos I well, Balce said, was first discovered in 1960 but the exploration was halted due to some operational problems.

He said the company is planning to conduct the spudding of the well within one month.

After the Malolos I drilling, the energy official said a new well, Malolos Nuevo, will be drilled.

Balce said G2G may invest about $5 million to develop one oil well.

According to Balce, the two potential oil finds are likely to have reserves of between 300 to 350 barrels a day.

This is the first time that G2G will engage in an onshore gas development project in the Philippines.  G2G, however, has similar projects in other countries like Australia.

As this developed, Balce said the Department of Energy (DOE) has recently signed commerciality declaration of the Libertad gas field in Bugo at the northern part of Cebu. The gas developer of the Libertad onshore oil field, is Forum Energy. 

The company will put up a 1.75-megawatt (MW) power facility that will sell electricity to Cebu Electric Cooperative Inc. (Cebeco).