Shell keen on finding another Malampaya

MANILA, Philippines - Global energy giant Royal Dutch Shell continues to look at exploration opportunities in the Philippines with hopes of possibly finding another Malampaya gas field, considered a gold mine in the natural gas business.

“We’re always looking. My job is to look at all opportunities available,” said Graeme Smith, Shell vice president for exploration in Asia and Australia.

He said the fiscal terms offered for the exploration areas and the stability of a country are among the factors he takes into consideration before deciding to explore a specific area.

The Philippines has “reasonably good” fiscal terms as well as stability, he pointed out.

But the most important factor is the technical aspect, which looks at the resource itself, he said.

“In the Philippines, there is some gas and there is some oil but whether or not it’s enough, we don’t know,” he added.

Shell leads a consortium that operates the Malampaya deep water gas-to-power project in Northwest Palawan, which signaled the birth of the natural gas industry in the country since it began operations in 2001.

The gas from the oil field supplies 30 percent of the Luzon grid’s requirements.

Shell Philippines Exploration B.V. (SPEx) leads the consortium. Other members are Chevron Malampaya LLC, with a 45-percent stake and state-led Philippine National Oil Co.-Exploration Corp.

Smith did not specify if the company would indeed participate in the latest contracting round launched by the Department of Energy but stressed that Shell is interested to look at all opportunities.

The DOE has offered new petroleum and coal areas for exploration under the Philippine Energy Contracting Round (PECR).

The PECR is a transparent and competitive system for awarding exploration contracts.

The goal is to showcase the petroleum and coal exploration opportunities in the country and to attract energy investors to develop indigenous coal, oil and gas resources.

The DOE has offered 15 coal areas for exploration and 11 petroleum areas and hopes to award to the private sector the coal areas by next month. Five companies submitted applications for nine areas.

For petroleum, the DOE has received interest from five foreign oil and gas firms.

The bids will be submitted no later than March 31, 2015, with June 2015 as the target awarding for petroleum under PECR 5.