QUEZON CITY (PIA) – President Ferdinand Marcos Jr. allows the extension of the Malampaya Service Contract Number 38 until 2039 to further the government’s efforts in achieving energy sustainability and security in the Philippines. The current contract for the Malampaya Deep Water Gas-to-Power Project is expected to expire on February 22, 2024.
“We optimistically look forward to the continued production and utilization of the remaining reserves of the Malampaya gas field, as well as further exploration and development of its untapped potential,” President Marcos said.
This energy project pioneered the launch of the natural gas industry in the Philippines. The endeavor focused on energy security has been laid since 1972 through the landmark Presidential Decree No. 87 of then President Ferdinand Marcos Sr.
Through the years, the project continues to provide benefits for the country and aids in its quest for sustainable energy, a clear reason for the extension.
“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,” the Chief Executive said.
Since 2001, the plant located 50 kilometers offshore Northwest Palawan has generated P374 billion in revenues. In 2022 alone, the project yielded about P26 billion in government revenues while powering up to 20% of Luzon’s electricity requirement.
Currently, the Malampaya project is possible because of the cooperation of the Philippine national government spearheaded by the Department of Energy (DOE), and the private sector through the developments and operation of the Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture partners Udenna Corporation and the Philippine National Oil Company-Exploration Corporation.
The President reiterates the responsibility of DOE to watch the project implementation as well in the next 15 years.
For his part, Energy Secretary Raphael Lotilla welcomed the renewal of SC 38 mentioning that the department has gone through evaluation before recommending the extension of the project.
“The assessment encompassed legal, technical, and financial capabilities, and confirmed the consortium’s capacity to sustain the production operations and meet its obligations under the renewal agreement,” he added.
The extension contract adds another requirement to conduct a minimum work program consisting of geological and geophysical studies and the drilling of at least two deep water wells during Sub-Phase 1 from 2024 to 2029. This is another long-term plan for the continuous exploration of existing gas fields that could contribute to increased fuel production.
In March 2023, Marcos also assured energy sector investors that his administration remains committed to extending all the support mechanisms to ensure a genuine partnership in a mutually beneficial relationship. He also mentioned during the Asia-Pacific Economic Cooperation (APEC) CEO Summit in Bangkok last November 2022 that renewable energy options such as hydropower, geothermal power, solar, and other low-emission energy sources are now a priority in the Philippines.
Since his assumption, the President has continuously expressed his commitment to energy security and sustainability in the country through local and international engagements including various bilateral agreements between the Philippines and other nations. (MVMV, PIA-CPSD)
Photo from Presidential Communications Office
