THE MANGAHAS INTERVIEWS

DOE looking for investors to develop gas fields nearby Malampaya; still open to China exploration

The Department of Energy (DOE) is looking for investors to develop gas fields near the Malampaya gas-to-power facility, as service contracts are set to end in the next two years.

According to Energy Secretary Raphael Lotilla, there is a need for more investors to develop nearby fields to address the decline in supply in the existing field.

“Sa perspektibo ng gobyerno, ang pangangailangan natin ay investors na mayroong intensyon or mayroong plano na ang nearby fields ay madevelop,” he said in The Mangahas Interviews.

“Hindi lamang ‘yung existing field kasi pababa na siya,” he added.

[From the perspective of the government, we need investors with the intention or plan to develop nearby fields, not just the existing field because it is already depleting.]

The Malampaya gas-to-power facility fuels three gas-fired power plants with a total generating capacity of 2,700 megawatts (MW) to provide 30 percent of the power generation requirements of Luzon.

The Service Contract 38 is located offshore northwest Palawan, with the government recording a total revenue share of $11.9 billion as of December 2020.

Just this month the DOE gave the go signal for Razon-led Prime Infrastructure Capital Inc. to acquire the 45% interest of Shell Philippines Exploration BV (SPEX) in the Malampaya Service Contract 38.

“‘Yun ang reason na nagkaroon ng sale ng Shell kasi sabi ng Shell sa atin, ‘Hindi na kami interesado na mag-develop ng oil and gas, additional gas fields, nawalan na kami ng interes,’” Lotilla said.

[That is the reason for the Shell sale because they said ‘We are no longer interested in developing oil and gas, additional gas fields, we have lost interest’.]

Lotilla also said that even if the existing gas field is developed, this would take two to three years to boost supplies so nearby natural gas fields really need to be developed.

The DOE earlier this month said Prime infra has also committed to expand gas production and look into developing nearby gas fields.

Prime Infra in July announced that its unit Prime Exploration Pte. Ltd. inked a share purchase agreement to acquire Malampaya Energy  from Davao-based businessman Dennis Uy’s Udenna Corp..

Uy’s Malampaya Energy inked a share purchase deal with Shell Petroleum N.V. to acquire SPEX in May 2021, but this did not push through after the Philippine National Oil Company Exploration (PNOC-EC) withdrew its consent.

Prior to Uy’s acquisition of Chevron’s participating stake and the Razon Group’s buyout of SPEX, Malampaya Consortium was composed of SPEX, Chevron, and the PNOC-EC — which still holds 10% interest in the gas field.

According to Lotilla, the Philippines also remains open to talks with China and other countries regarding joint exploration deals.

“In other areas, we remain open and let’s all be patient because we need to resolve these things in an orderly manner,” he said.

“Ang Department of Foreign Affairs (DFA) at even ‘yung ating security cluster at ‘yung legal cluster ay patuloy na na pinag-aaralan ‘yung ating mga options na ito, ngunit ang sinusulong natin ‘yung development sa ibang areas,” he added.

[The DFA, along with the security and legal cluster, continue to study our options, but what we are pushing for is the development of other areas.]

The DFA in August said the country is willing to discuss a joint oil and gas exploration in the West Philippine Sea with China. — RSJ, GMA News