MANILA, Philippines — China International Mining Petroleum Co. Ltd. (CIMP) is looking to build a refinery in the Alegria oil and gas field in Cebu.
CIMP has signed a turnkey drilling service agreement with East Asia Oil Engineering Group Ltd. to drill six production wells in Alegria, according to a disclosure of CIMP’s parent firm Polyard Petroleum International Group Ltd. to The Stock Exchange of Hong Kong Ltd.
This after the company “identified the primary production layers” and expressed its desire to “start drilling of production wells.”
CIMP said each well is estimated to cost $815,000, or a total of $4.89 million for six production wells.
Also under the deal, East Asia Oil can invest in an on-site oil refinery which can process 800,000 barrels of oil per annum.
For its part, CIMP will offer the land for the setup and assist the contractor in securing all relevant permits, clearances, and approval from the national and regional administrative offices, regulatory agencies, and local government units for the construction and operation of the oil refinery.
CIMP said a refinery in Alegria “would no doubt better the company’s crude oil selling activities.”
The drilling agreement with East Asia Oil—a company operating business in the oil services—is valid until end-December this year.
The Alegria oil and gas field, touted to be the first onshore oil discovery and production to date, was inaugurated by President Duterte in May 2018.
CIMP operates the oil and gas field under Petroleum Service Contract 49 for 25 years.
The oil field is discovered to have an estimated 27.93 million barrels of oil with a possible production recovery of 3.35 MMBO or a conservative estimate of 12 percent of total oil in place/reserves.
For natural gas, about 9.42 billion cubic feet (bcf) reserves were found, with the recoverable resource estimated at 6.6 bcf or about 70 percent of total natural gas in place/reserves.
The oil and gas field is producing 200 barrels of oil per day (BPD) from six wells and will add more wells to produce 1,000 BPD.