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A CHINESE firm will start drilling for oil in the southwestern town of Alegria, Cebu next month.

Officials of China International Mining Petroleum Company Ltd. (CIMPCL), in cooperation with Polyard Petroleum Company Ltd., paid a courtesy call on Gov. Hilario Davide III yesterday and informed him about their plan yesterday.

The governor also met with Australian firm Gas2Grid officials who told him about their plan to conduct oil flow tests in Aloguinsan town in the next few months.

Local support

Department of Energy (DOE) Visayas Director Antonio Labios sat in on both meetings.

Vladimir Gerchikov, CIMPCL manager in the Philippines, said they already have a contractor willing to conduct the drilling in the mountain barangay of Montpeller.

Gerchikov said the local government supports the oil exploration activity.

“Our project is one of the major projects for Cebu and the people of Cebu will highly benefit in case we will have commercial quantity of oil,” he said.

In another development, Gas2Grid will conduct a test flow in the next 12 months after oil was discovered in Malolos 1, Aloguinsan.

Labios said the test flow will determine the commercial viability of the discovered oil.

Extended contract

Dennis Morton, Gas2Grid managing director, said if there’s a commercial quantity of oil, the frim will file an application with the DOE to operate and develop the field for 25 years.

Gas2Grid had announced that the DOE approved its application to declare Malolos 1 an oil discovery.

Before the firm receives a service contract from DOE, Labios said it has to comply with the technical and financial requirement.

He said Gas2Grid was issued a service contract in 2004. The contract expired in January, and the firm received a one-year extension to conduct the test flow, Labios said.

He said the Australian firm can probably finish the test flow in a span of three months.

Labios said both firms assured the governor that both activities (oil drilling and test flow) will have no harmful effect on the environment.