Shell turns over $1.1-billion Malampaya royalties to PNoy

President Benigno Aquino III on Friday symbolically received a $1.1 billion check representing the government's share of the earnings of the Malampaya Deepwater Gas-to-Power project in 2011.   During the handover, Aquino accepted the check for $1,134,669,157 from officials of the Malampaya joint venture project partners.   “It’s a joint venture, and we have a share in the proceeds. That’s the share. It’s given every year. That’s the total for 2011. That goes to the Malampaya Fund. That’s with the DoF (Department of Finance),”  Energy Secretary Jose Rene Almendras said during the turnover.  

According to the Department of Budget and Management, the Aquino administration tapped the Malampaya Fund for various purposes, including:  

• P2 billion for fuel requirements of the National Power Corporation-Small Power Utilities Group (NPC-SPUG), to avert a power shortage in off-grid areas;

•  P450 million for the Pantawid Pasada program, as direct support to jeepney and tricycle drivers affected by the recent spate of oil price hikes; and

•  P423 million for the purchase of the USS Hamilton cutter marine vessel to strengthen the security perimeter of the Malampaya Natural Gas Project.

  Royalties flow   The government’s share or royalties from Malampaya is given annually from the total earnings of the project.   The Malampaya Deep Water Gas-to-Power project is spearheaded by the DOE, developed and operated by Shell Philippines Exploration B.V. (SPEX) with joint venture partners Chevron Malampaya LLC and the Philippine National Oil Company Exploration Corporation.   Almendras said the government will continue to get the same amount of royalties “if the price (of natural gas) stays as it is.”  But he said the amount of the government’s share will decrease when the government reinvests in the succeeding phases of the project.   “We have to re-invest in Malampaya Phase II and Phase III, this is still the original contract, the Phase II and Phase III are the original contract, which will require us to re-invest, so that we can get more gas and it will prolong the supply of gas, because we need the gas as much as we can,” said Almendras.   Also at the turnover of the royalties were Finance Secretary Cesar Purisima, Philippine National Oil Company chairman and CEO Gemiliano Lopez, Shell Philippines managing director Sebastian Quinones Jr. and Chevron Malampaya LLC Asset Manager  Sabino Santos. — ELR/HS, GMA News