Marcos renews contract for production of Malampaya gas field
President Ferdinand Marcos Jr. approved the renewal of the contract for the continued production of the Malampaya gas field for 15 more years.
"Today we mark a very significant milestone as we pursue another huge endeavour that will promise monumental rewards for our country and our people," Marcos said during Monday's ceremonial signing event at the Palace.
"It holds the key to our drive towards energy security and is calculated to greatly advance the nation's energy interest," he added.
In a statement, the Department of Energy (DOE) said Marcos has signed the Renewal Agreement for the Malampaya Service Contract No. 38 (SC 38) that renewed the 25-year production contract, which shall expire on February 22 2024 for a 15 years or until February 22, 2039.
"This will allow for the continued production of the Malampaya gas field, ensuring that the remaining gas reserves are further explored and utilized," it stated.
Malampaya is a deepwater gas-condensate reservoir, located 65 kilometers northwest of the island of Palawan.
"Because of the contract renewal, the government will continue to generate revenues from the project through a favorable sharing scheme with a private sector partner and the government," Marcos said.
"Needless to say, this project will reduce our country's dependence on oil imports and ensure a more stable supply of cleaner energy from an indigenous local source," he added.
During the three-decade operation of the Malampaya project, the President said the project generated P374 billion worth of revenues for the government.
The DOE said "aside from continuing the production operations, the SC 38 Consortium is required to conduct a minimum work program consisting of geological and geophysical studies and the drilling of at least two deep water wells during the Sub-Phase 1 from 2024 to 2029".
"This firm work program is geared towards unlocking the potential both in the existing gas field and nearby prospect areas to provide incremental production," it stated.
"In addition, 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. Should there be failure to comply, the SC 38 Consortium is obligated to relinquish a portion of the exploration areas," the DOE added.
It also stressed that the "discovery of additional reserves in the Malampaya gas field will boost the country’s quest for energy security" and is "expected to encourage opportunities for further exploration in the country, which to date remains underexplored, and to add to the Philippines’ energy portfolio,"
According to the DOE "in consonance with international oil and gas exploration practice, the SC 38 Consortium is required to submit a Decommissioning Plan and Budget covering the abandonment of wells and decommissioning of facilities in accordance with applicable international standards, to include timing and costs, within 30 calendar days from the effectivity of the Renewal Agreement for approval by the Department of Energy." Robina Asido/DMS
