Gas2Grid awaits nod on more Cebu oil tests

CEBU, Philippines - Although it has been granted a one-year contract extension by the national government, the Australian oil firm that discovered oil in Aloguinsan town has yet to get the go signal to conduct commercial viability testing.

Department of Energy (DOE)-7 Director Antonio Labios said Gas2Grid is still waiting for the DOE central office in Manila for it to start doing any work in the southwestern Cebu town.

“The company has not yet started any activity in the Aloguinsan oil area. They are still waiting for the approval of their work program by DOE Manila,” he said.

Gas2Grid earlier announced that it intends to commence testing this month almost 10 years since oil exploration began in the area.

Labios said his office inquired with a local Gas2Grid representative and was told that oil firm is currently preparing its equipment for the testing while waiting for the work program approval.

Gas2Grid’s contract (SC 44), issued in 2004, covers 750 square kilometers of central Cebu, including portions of the cities of Carcar, Toledo and Naga, and the towns of Aloguinsan, Pinamungajan, Barili, Dumanjug, Ronda, Alcantara, Moalboal and Sibonga.

The Malolos-1 drilling in Aloguisan, which tested positive for oil production in two separate sandstone intervals, is at the boundary of Carcar City and Aloguinsan town.

The potential oil volume spotted in the Malolos oil field, based on Gas2Grid’s initial assessment, was described as “contingent resource” and ranges between a “low estimate” of four million barrels and a “high estimate” of 42 million barrels, with the “best estimate” of 12 million barrels of “total oil in place.”

Gas2Grid believes that a longer testing period, estimated to cost $500,000 to $1 million, would allow the firm to have an independent expert  certify and convert the “contingent” oil resource into “proven, probable, and possible oil reserves.”

An earlier announcement stated that should this venture be commercially viable and operational, 60 percent of total revenue goes to the government while 40 percent would be Gas2Grid’s.

Aloguinsan town officials have welcomed the development, saying it would add to the coffers of the fourth class municipality, whose primary livelihood include fishing and farming. (FREEMAN)