CIMP finalizing talks with refinery to sell its crude oil

By Victor V. Saulon, Sub-editor
CHINA International Mining Petroleum Co. Ltd. (CIMP), the local entity behind the country’s first onshore oil discovery, is planning to ramp up its extraction to 1,000 barrels daily as it finalizes talks with a local refinery to sell its crude oil.
“We want to export it out of Cebu going to a refinery,” said Edgar Benedict C. Cutiongco, CIMP assistant country manager, in a chance interview.
He declined to disclose the identity of the refinery, although there are only two oil companies in the country with a refinery — Petron Corp. and Pilipinas Shell Petroleum Corp.
Mr. Cutiongco said he was finalizing the sale and purchase agreement (SPA) with the refinery, with the signing of the contract triggering the increase of the project’s storage capacity.
CIMP, a company 51% owned by Hong Kong-listed Polyard Petroleum International Group Ltd., has invested $30.80 million in Service Contract (SC) 49 in the oil field up in the mountains of Alegria town in Cebu.
When the project was launched in May 2018, the company said it expected to drill at least three million barrels of oil in the next 19 years. It currently extracts 200 barrels a day. It caters to small industrial users near the area.
“Ang crude oil is very specific ‘yan. Hindi mo pwedeng i-derecho ‘yan sa barko. So ang target namin ngayon mga sugar mills kasi crude oil pa ito, so hindi pa refined (Crude oil is very specific. You cannot move it directly to a ship. So our target now are sugar mills because it’s still crude oil, and not yet refined.),” Mr. Cutiongco said.
“Once we sign that agreement we can [start] delivery to the refinery…. We’re looking initially at around 150 to 200 barrels per day,” he added.
Earlier this year, the Department of Energy said it was monitoring six exploration wells drilled by CIMP and its partners. The company acquired participating interest in SC 49 in southern Cebu and became its operator from July 1, 2009.
Skywealth Group Holdings Ltd. holds a 16% interest, with Phil-Mal Energy International, Inc. holding the rest.
Mr. Cutiongco said the company will to continue to serve its existing customers in Cebu even if it signs an SPA with the refinery.
“Pag na-establish na namin ‘yung route na ‘yun we can ramp it up (Once we have established that route, we can ramp it up). We were looking at about a 1,000 barrels per day in a matter of two to three years,” he said.
The Alegria oil field covers a land area of 197,000 hectares, with about 42,749 hectares allotted to the production area.
The community or the barangays that host the oil field stand to corner 14% of the “profit oil” of the project. Profit oil is the remaining gains from production after the participating partners have been compensated for their investments and operating expenses.
The law requires 60% of profit to go to the government, and 40% to the investors. The government share is divided as 60% for the national coffers, 18% for the municipality, 8% to the provincial government and the rest to the barangays.