DOE's Lotilla open to looking into Malampaya license extension ‘down the line’

Energy Secretary Raphael Perpetuo Lotilla was open to looking into the possibility of extending the license for Service Contract 38 or the Malampaya gas-to-power project.

At a virtual press briefing on Tuesday, Lotilla said, “Of course, we will [study] should there be an application for extension.”

The license for the SC 38 is set to expire in 2024.

Ports and casino tycoon Enrique Razon Jr., who bought Dennis Uy’s Malampaya Energy, expressed intent to seek an extension of the Malampaya consortium license.

Razon’s Prime Infrastructure Capital Inc.’s unit Prime Exploration Pte. Ltd. signed a share purchase agreement acquiring Malampaya Energy.

In May 2021, Malampaya Energy acquired Shell Philippines Exploration B.V. (SPEX), which holds a 45% operating interest in Service Contract 38 or the Malampaya gas field.

Uy’s group also bought out Chevron Philippines' share in the Malampaya Consortium — through UC Malampaya — in 2020, which had 45% participating interest in SC 38.

The Philippine National Oil Company Exploration Corporation (PNOC-EC), however, withheld its consent for the divestment of SPEX's shares in the Malampaya gas field to Uy's group, thereby delaying its gain of 90% control of the gas field.

Before Uy's planned takeover, the Malampaya Consortium was composed of SPEX, Chevron, and the PNOC-EC, which still holds 10% interest in the gas field.

Lotilla said extending the license for SC 38 “will come down the line, because first, we have to deal with the issues about the sale of the Shell operatorship to another entity.”

The Energy chief, however, said “it would be premature for me to speak on this particular matter.”

“As you know, the PNOC-EC has a 10% interest in the Malampaya consortium and the parties that you have mentioned have communicated to PNOC-EC, the exploration corporation subsidy arm of the Philippine National Oil Company. Now, as Department of Energy Secretary, it would be--I would be heading the agency that would also be reviewing this, from the standpoint of the Department of Energy,” he said.

“So while I am the chairman of the PNOC Exploration Corporation, it would not be good for me to be participating in the deliberations of the PNOC-EC on this, and then reviewing myself later on,” he added. — DVM, GMA News