Philippines sets eyes on Visayas for petroleum exploration

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The country is looking to revive Cebu’s Alegria Oil and Gas Field and push natural hydrogen exploration in Leyte

CEBU, Philippines – The Department of Energy announced on Tuesday, April 7, that President Ferdinand Marcos Jr. had signed two new petroleum service contracts to push indigenous energy research and acquisition in the Visayas.

“These Petroleum Service Contracts reflect our determination to move indigenous energy development forward, both by revitalizing known resources and by opening pathways for frontier exploration,” the DOE said.

The first contract, Service Contract No. 89, was awarded to Texcal Mahato Incorporated for the restarting of operations at the onshore Alegria Oil and Gas Field in the southwestern town of Alegria, Cebu.

The second contract, Service Contract No. 90, was awarded to Matahio Energy Philippines and Ophiolite Energy for natural hydrogen exploration in onshore Leyte.

“We continue in the DOE to push for these upstream initiatives. In fact, we have now 12 new service contracts since [the start of] the [Marcos] administration,” DOE Undersecretary Alessandro Sales said in a presser.

What are the projects for?

According to Sales, there are established oil reserves in the Alegria Oil and Gas Field amounting to less than 4 million recoverable barrels of oil. 

The DOE, in a press release, said that the field’s total natural gas reserves were placed at around 9.42 billion cubic feet, with an estimated 6.6 billion cubic feet considered recoverable resources.

“There is a plan to get the oil refined in place, in terms of bunker fuel and diesel, so it will start as a small-scale type of operation so we can make use of the resource,” Sales told reporters.

The DOE undersecretary added that the plan for the associated gas reserves in the field will be to use them for power.

“‘Yung (The) current known reserves is small-scale. Of course, it does not bar them from doing further exploration, baka sa ilalim may mas magaganda at mas malalaking madidiskubre (there may be something bigger and better to discover below),” Sales shared.

The oil and gas field in Alegria town has a production area of around 42,000 hectares and used to be handled by the China International Mining Petroleum Co. Ltd., which initiated the oil exploration there in 2014, according to a Cebu Daily News article.

In 2021, officials from the DOE informed lawmakers during a Senate hearing on the Midstream Natural Gas Industry Act that oil production from the Alegria oil and gas field was not enough to supply fuel on a regional and national level.

By 2023, field operations were stopped due to health restrictions caused by the COVID-19 pandemic lockdowns.

Meanwhile, the DOE said that the Leyte project would put focus on ophiolite formations and research into serpentinization, a metamorphic process that happens when water reacts with underground minerals to produce natural hydrogen.

The energy department said Leyte’s geological conditions offer “a promising site for assessing whether naturally occurring hydrogen may be present in commercially viable quantities.”

“This is a new clean energy resource that we hope its presence and economic viability can be established in the country,” Sales said. – Rappler.com