CEBU CITY, PHILIPPINES — An Indonesian-backed firm is set to revive oil and gas production in Alegria, Cebu after President Ferdinand Marcos Jr. awarded a new service contract allowing the company to take over operations of the oil field from a Chinese firm that previously held the project.
Department of Energy (DOE) Visayas Director Renante Sevilla told members of the Cebu Provincial Board during their regular session on Monday that the President has approved Service Contract (SC) 89, granting Texcal Energy–Mahato Inc. the right to operate the Alegria Oil and Gas Field.
Sevilla said the project marks a fresh start for the oil field, which has been inactive for about three years following the termination of its previous operator, China International Mining Petroleum Company Limited, under Service Contract 49.
Fresh start
The new contractor is expected to move the project into its production phase once pending issues are resolved.
“Naay bag-ong contractor…gi-award so silay mo-implement sa production sa oil,” Sevilla said.
He added, however, that operations will not begin immediately as the DOE continues to address concerns, particularly those involving local stakeholders.
“Within the year or this semester, kaya… karon naa lang gyud issues. Next week makig-dialogue pa ta with the LGU together with the awarded contractor,” he said.
Sevilla acknowledged that coordination gaps with local government units (LGUs) contributed to the difficulties encountered by the previous operator.
“We make sure na properly coordinated gyud ang LGU and other concerned stakeholders. Kay before mao manay problema,” he said, adding that lessons from past setbacks are being taken into account.
Resource potential
DOE data show that the Alegria field contains an estimated 27.93 million barrels of oil in place, of which about 3.35 million barrels, or roughly 12 percent, are considered recoverable.
The site also holds natural gas reserves estimated at 6.6 billion cubic feet, which could be used for power generation.
Sevilla underscored the significance of these resources amid the country’s growing energy needs.
“Of course, timely kaayo kay kuwang naman ta sa oil. So kani locally produced,” he said.
The Alegria oil field drew national attention in 2018 after the DOE confirmed the presence of oil and natural gas deposits in the area.
On March 12, 2018, following approval of its Plan of Development, CIMP signed a crude oil sale and purchase agreement with a local buyer, marking the start of oil sales. Two days later, the DOE and CIMP issued a Joint Declaration of Commerciality, affirming the field’s production viability.
Operations were halted in 2023 after the DOE terminated CIMP’s contract due to its inability to sustain production, particularly following disruptions caused by the COVID-19 pandemic.
Service Contract 49 covered approximately 197,000 hectares, with about 42,749 hectares designated as the production area. It took effect on March 1, 2005, and was originally set to run until March 1, 2040.
Under Presidential Decree No. 87, petroleum revenues are shared among the national government and host LGUs, including the province, municipality, and barangays—a framework that remains in place under the new contract.
While the approval of SC 89 signals renewed momentum, the DOE said preparatory work, including stakeholder consultations, must be completed before full-scale operations begin.
Sevilla said talks with LGUs are scheduled in the coming days to address outstanding concerns and ensure smoother project implementation.
The DOE expressed optimism that, with improved coordination and a new operator, the Alegria oil field can finally realize its long-anticipated potential.
| Written by Jonnavie Villa, Sandara Laurente (CTU-Tuburan Intern) and Ashley Chad Jopia (CTU-Tuburan Intern)/FPL
