Work on new Malampaya wells on track – Lotilla

MANILA, Philippines — The Malampaya consortium, led by operator Prime Energy Resources Development B.V. of tycoon Enrique Razon, is on track to start drilling deep water wells by the latter part of next year, with additional production from the field seen by 2026.

“The good news that was shared with the President by the Malampaya consortium is that we are on track to having the 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,” Energy Secretary Raphael Lotilla said in a forum yesterday.

The Malampaya Service Contract 38 is composed of Prime Energy as operator and UC38 LLC of the Udenna Group and state-run Philippine National Oil Co.-Exploration Corp.

The consortium is looking to invest about $600 million in its bid to further explore and utilize the remaining gas reserves in the Malampaya gas field.

“Ever since the President assumed office, he has committed the energy sector toward stabilizing the investment environment, the investment climate for investors in the upstream or the oil and gas industry. And so we were able to extend or renew the service contract for Malampaya,” Lotilla said.

President Marcos on May 15 signed the renewal agreement for the service contract, extending it for a final 15 years, or until Feb. 22, 2039, to allow for the continued production of the gas field.

The Malampaya project is one of the country’s most important power assets, as it produces natural gas that accounts for about 20 percent of Luzon’s total electricity requirements.

Under its renewed service contract agreement, the Malampaya 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.

“Natural gas is going to provide a backup for the uncertainties, for instance, in the supply of renewables. What I mean by that is by nature, solar and wind are intermittent. Therefore, we need natural gas to make up for those volatilities,” Lotilla said.

Meanwhile, in terms of oil and gas exploration in the West Philippine Sea, Lotilla said the government, led by the Department of Foreign Affairs, has started talking again with China.