First drilling on new Malampaya wells on schedule —DOE

The first drilling on the proposed two new deep water wells at the Malampaya natural gas field is on schedule, Energy Secretary Raphael Lotilla said Wednesday.

Lotilla said that the Malampaya Consortium - led by tycoon Enrique Razon’s Prime Energy Resources Development B.V. - updated President Ferdinand Marcos Jr. on Tuesday about the progress on the gas-to-power facility.

“The good news that was shared with the President yesterday by the Malampaya consortium is that we are on track to having the first drilling for the nearby fields by the end of 2024 and we are looking forward to new or additional supply from the same service contract by 2026,” Lotilla said at the Pandesal Forum.

The DOE has said the present best estimates for Malampaya's near field is about an additional 210 billion cubic feet of gas.

Marcos welcomed the drilling schedule for Service Contract 38 or the Malapaya field, according to the Presidential Communications Office.

In February, Marcos signed the renewal agreement for the Malampaya SC 38, allowing the continued production of the gas field for another 15 years.

The SC 38’s 25-year production contract — set to expire on February 22, 2024 — was renewed until February 22, 2039.

“Ever since ( Marcos) assumed office, he  has committed the energy sector towards stabilizing the investment environment... We were able to extend or renew the service contract,” Lotilla said.

The Malampaya Consortium committed to investing about $600 million (roughly P33.7 billion) for further exploration and drilling activities beyond the existing production area within the SC 38. 

The consortium was mandated to explore and drill at least two new deep water wells during the first phase (2024 to 2029) of the work program under the 15-year renewed production contract.

"The conduct of exploratory drilling further away from the Malampaya production area within the Service Contract is a requirement for the SC 38 consortium to retain the exploration areas,” Lotilla said.

Aside from Prime Energy, a subsidiary of Prime Infrastructure Capital Inc., other members of the SC 38 Consortium are Dennis Uy-led UC38 LLC and the state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC).

Prime Energy is the operator and has a 45-percent stake in the project. UC38 also has a 45% stake, while the remaining 10% is owned by PNOC-EC.

The Malampaya gas-to-power project supplies natural gas to power four generation plants in Batangas —Santa Rita, San Lorenzo, San Gabriel, and Avion— with a combined capacity of 2,011 megawatts (MW).

From October 2001 to December 2022, the SC 38 consortium remitted more than $13.14 billion to the government. —NB, GMA Integrated News