Prime Energy preps for Malampaya drilling

MANILA, Philippines — Prime Energy Resources Development B.V., a subsidiary of Enrique Razon-led Prime Infrastructure Capital and the operator of the Malampaya gas-to-power project, is gearing up for a $600 million undertaking to drill at  least two deepwater wells in 2025.

Prime Energy said it is ramping up preparations for the drilling, which if successful and proves that gas reserves can be produced commercially, then necessary pipelines will be installed and tied into the existing Malampaya  production facilities.

The company expects production from the new wells in 2026.

Prime Energy managing director Donnabel Kuizon Cruz said the planned drilling and development called Malampaya Phase 4 requires an investment of more than $600 million.

She said expenditure eyed in 2024 is about $187 million, which will include procurement of drilling equipment, subsea equipment and umbilicals, and pipelines, as well as securing the drilling rig.

According to the company, the Department of Energy (DOE)’s support will help ensure the quick and successful implementation of Malampaya Phase 4.

Prime Energy and its partners  sought the support of the DOE to ensure that there is a market for the new gas volumes.

The DOE’s support has likewise been sought to streamline and simplify the permits and requirements imposed by various government agencies, which could hamper the completion of Malampaya Phase 4 on time and within budget.

Service Contract (SC) 38, which covers the Malampaya gas field, been renewed for another 15 years, or until Feb. 22, 2039, by President Marcos last May to unlock the potentials of both the existing Malampaya gas field and nearby areas.

With gas production from Malampaya declining after 22 years of operation, Prime Energy said the renewal of SC 38 paves the way for new investment to explore and develop additional gas reserves.

The Malampaya consortium is composed of Prime Energy as the operator, UC38 LLC of the Udenna Group, and state-run PNOC-EC.

Prime Energy, meanwhile, also clarified that China has never claimed the Malampaya contract area.

It said that from 1988 when exploration activities for SC 38 started up to date, China has not intervened in any Malampaya petroleum operations.

“Prime Energy is optimistic that there will be no intervention or disruption from China when drilling and development activities take place in 2025 and 2026,” the company said.