Alegria, Cebu Oil Field Drilling Services to Start Soon

The highly anticipated drilling operations of the six production wells in Alegria Cebu's oil field is about to start according to the announcement released by Polyard Petroleum International Group Limited last January 11, 2020.

According to Polyard Petroluem they had entered into a Turnkey Drilling Service Agreement with a contractor that had provided oil field engineering and technology services.

Petroleum Service Contract (SC) No. 49 is an onshore oil field located in Barangay Montepeller, Alegria town of southwestern Cebu. China International Mining Petroleum Co. Ltd. (CIMP), a subsidiary of Polyard Petroleum International Group Limited, holds SC No. 49.

Based upon the two-page company disclosure submitted before the Hong Kong Stock Exchange and the Hong Kong Exchanges and Clearing Limited, Polyard Petroleum stated that CIMP had completed the exploration stage for SC No. 49 that covered the Alegria oil field.

As a result, the company signed a Turnkey Drilling Service Agreement with East Asia Oil Engineering Group Limited for the drilling of six production wells.

“After a continuous production for eight months, CIMP has already identified the primary production layers and wants to start drilling of production wells,” the statement said.

The Drilling Agreement, whose validity is only up to December 31, 2020, allows East Asia Oil to invest in an on-site oil refinery that can process 800,000 barrels of oil per annum.

“CIMP will offer lands 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, including but not limited to all health, safety, and environmental permits, and immigration and Customs clearances,” the company said.

According to Polyard Petroleum each production well would cost US$ 815,000 — bringing to a total of US$ 4.9 million — excluding the 8 percent withholding tax.

Last May 2018, President Rody Duterte led the official exploration of the oil field in Alegria, Cub. CIMP acquired an 80 percent stake in the service contract that covers a 25-year production period.

Under Presidential Decree 87 or the Oil Exploration and Development Act of 1971, the Philippine government will get a 60 percent share from the net sales of the project. CIMP will get a 40 percent share.

The 60 percent share of the government will be further divided as follows: 60 percent will go to the national government, 18 percent to the Alegria municipal government, 14 percent to the host Barangay Montpeller, and 8 percent to the Cebu provincial government.

Source: Cebu Daily News

Alegria, Cebu Oil Field Drilling Services to Start Soon Alegria, Cebu Oil Field Drilling Services to Start Soon Reviewed by Phil Newsome on January 21, 2020 Rating: 5
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