DOE official denies knowing oil discovery in Cebu

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Friday, January 10, 2014


CEBU CITY -- The Department of Energy (DOE) Visayas said on Thursday it has no idea about the report of an oil discovery in Cebu, dubbed as Malolos-1 oil.

DOE Visayas Director Antonio Labios said any oil discovery should have been announced by the President.

However, Dennis Morton of Australian firm Gas2Grid said they applied with the DOE (in Manila) for the declaration of the oil discovery as the first step in appraising and developing the Malolos oilfield.

Morton said the DOE approved their application, which will lead to additional minimum period of 12 months to flow test the well and establish commercial production.

Positive effects

Following the completion of the flow test, and with the DOE’s approval of commercial status, the Malolos oilfield will enter a 25-year production phase to supply power to distribution utilities, he said.

Labios said oil and natural gas deposits are possible under Cebu soil as evidenced in the natural gas found in La Libertad, Bogo City, which supplies one megawatt daily to the Cebu Electric Cooperative (Cebeco) 2.

While coal-fired power plants sell power to distribution utilities at more than P7 per kilowatt hour (kwh), the natural gas in Bogo City is sold to Cebeco 2 at only more than P5 per kwh.

Labios said Cebu is located within the “Visayan Basin,” where oil and natural gas are present.

He said a landowner may get royalties if the oil or gas deposit is found on his property.

Aloguinsan can expect positive effects from the oil discovery like increased revenues and more jobs available to townsfolk, said Vice Mayor Augustus Ceasar Moreno.

Aware

In a report from an ABS-CBN website, Gas2Grid announced that the DOE approved its application declaring the Malolos-1 oil well as an “oil discovery.”

Moreno said he was not yet informed about the oil discovery but the Municipal Government was aware that the firm was looking for oil in the mountain barangay of Olango.

Moreno said officials from the Gas2Grid paid him a visit at the Municipal Hall before the oil exploration began.

He said there has been constant communication between the Municipality and the company.

“All I can see are positive effects. Kung duna man gani negative effects malabwan siya sa (If there are negative effects, I’m sure that these will be surpassed by the) positive effects,” he said.

He said Olango residents were glad when they found out someone was going to look for oil in their area.

Gas2Grid hired local residents to help in the exploration.

“Revenues atong gusto. Kung naay revenues makahatag ta sa basic needs sa mga taw (We want revenues. If there are revenues, we can provide basic needs of the people),” Moreno said.

“Olango will not only benefit but also the town of Aloguinsan, the Province of Cebu and the Philippines,” Moreno said in Cebuano.

Gov. Hilario Davide III, for his part, said the oil discovery will generate employment in the southern part of the province.

“Kung kinsa may interesado niana, kinsa’y mo-explore niana, (Whoever is involved in the endeavor) will have to deal with the Provincial Government. And the Provincial Government will have to ask the people, kanang mga stakeholders tingali (particularly the stakeholders),” he said.

The governor said no one from the company has paid him a courtesy call. (Sun.Star Cebu)

Published in the Sun.Star Cebu newspaper on January 10, 2014.

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