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DOE compelled to divulge plans on Malampaya operations

Senator Win Gatchalian compelled the Department of Energy (DOE) to divulge its plans and programs on Malampaya in light of the divestment of its operator Shell Philippines Exploration B.V. (SPEX) and the nearing expiration of Petroleum Service Contract (SC) No. 38 or the Malampaya deep water gas-to-power project to ensure the future of its operations and the continuous supply of energy in the country.


MALAMPAYA, PALAWAN, Philippines – The iconic gas flare of the Malampaya Deepwater Gas-to-Power project, stands some 80 km west of northern Palawan, pictured on 18 March 2017. The project extracts natural gas deposits under the sea bed of the West Philippine Sea, which are then supplied to power generating facilities in Batangas through an underwater pipeline, thus sustaining 19.16% of the country’s supply of electricity for 2020. Photo by Mark Cayabyab/OS WIN GATCHALIAN

“Given the significant role that the Malampaya project plays in the Philippines’ energy security, it is imperative that the DOE apprise the Filipino public on Malampaya’s operations — the remaining natural gas reserves and the government’s plans for continuous energy  supply, likewise on the pending request for the extension of SC No. 38,”the senator said in filing Resolution No. 724.

Gatchalian’s Committee on Energy will conduct an inquiry into the status of the sale of the stake of SPEX and the basis for the DOE’s decision if it approves the sale. The senator also wants to know the DOE’s direction amid the impending expiration of Malampaya’s service contract less than three years from now.

SPEX, in September last year, announced plans to put up for sale its 45% interest in the Malampaya project.  The other holder of the 45% interest, Chevron Malampaya LLC sold its stake to UC Malampaya Philippines in March last year. Completing the consortium is the state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC) which has the minority interest of 10%.

“It is critical for the DOE to ensure that whoever gets hold of Shell’s interest should have, not just similar experience or capacity, but more so the technical, financial and legal capability to operate the Malampaya project or to be a service contractor,” Gatchalian emphasized, adding that it is incumbent upon the DOE to ensure that the transfer of interests of the members of the consortium should go through a comprehensive review and evaluation pursuant to the requirement under Presidential Decree (PD) No. 87.

The Malampaya Project has become the country’s most significant oil and gas upstream development supplying 19.16% of the country’s supply of electricity for 2020, and providing a crucial source of income for the government with a total net national government share amounting to P261,681,610,752.59 since it began commercial operations in 2002 until 2019.