Aloguinsan officials support oil drilling

CEBU, Philippines - The local government unit of Aloguinsan, Cebu assured its full support on the oil drilling project in the Malolos-1 Oil Field which is set to start next month.

Aloguinsan Mayor Cynthia Moreno made the assurance due to possible protest action to be launched by some environmental groups.

“We can do our best to help implement the project,” Moreno said.

Moreno said however that to protect the oil firm is not only the concern of the local government but also of the Department of Energy, Department of Environment and Natural Resources and the Province of Cebu.

The DOE has approved last week the application of the Australian-based Gas2Grid Limited to commence the Malolos-1 extended oil production.

Once operational, the local government units involved – from the province, municipality down to the barangay – will get their respective shares of the gross revenues.

Residents in Barangay Olango where the Malolos-1 oil rig is located welcomed the developments knowing the benefits it can give to them.

Vice Mayor Augustus Caesar Moreno, husband of the mayor, said that when the exploration started in 2005, Gas2Grid employed around 50 local residents. Another 30 local residents were hired during the testing stage.

A statement from Gas2Grid said the operation is still in a testing stage though because the company still has to confirm commercial viability of the oil field.

The DOE had previously extended Gas2Grid’s Service Contract 44 for a 12-month period from Jan. 29, 2014 so it can do more tests, the statement also said.

According to the company, the prolonged period of oil production testing aims to gather sufficient technical information to confirm commerciality of  the Malolos Oil Field to justify the DOE awarding Gas2Grid, a 25-year production period leading to full field appraisal and development.

The company earlier reported a “contingent resource” of oil in the two productive sandstones for the Malolos Oil Field. It made a “low estimate” of 6.8 million barrels and a “high estimate” (3C) of 68.1 million barrels, with a “best estimate” of  20.4 million barrels of “total oil initially in place.”

This contingent resource is in addition to the unrisked prospective resources released to the Australian Stock Exchange on January 29, 2014, the company said.

Gas2Grid said the large size of contingent and prospective resources justifies further exploration within SC 44.

The company is continuing discussions with interested parties for funding the complete appraisal and development work (seismic acquisition, production well-drilling and production facilities) at the Malolos Oil Field.  (FREEMAN)