Talks on the possible extension of the rights of the consortium currently operating the Malampaya resource proceed despite issues raised on the sale of the operating entity.
The Department of Energy (DOE) said to ensure the country’s energy security, talks on the extension can proceed independently from the ongoing review of the pending sale of Shell Philippines Exploration B.V.’s (SPEX) 45 percent stake in the project to Udenna’s Malampaya Energy XP.
Gerardo Erguiza Jr., DOE assistant secretary, said in a virtual briefing yesterday, SPEX is the one talking to the government on the Malampaya contract extension and not Malampaya Energy as the deal between the companies is yet to be finalized.
Erguiza said eight parameters will determine the extension: the remaining natural gas reserves; an updated work program; decommissioning and restoration plans; asset disposal; gas pricing; setting up of a social development fund; government-contractor revenue sharing; and the banked gas.
Erguiza said revenue sharing and the banked gas are the only parameters yet to be agreed upon.
Erguiza said from the current 60-40 revenue sharing in favor of the government, the DOE wants to explore if it can be increased to 80-20 or the alternative position of 70-30, in favor of Filipinos.
Erguiza did not provide details on the issues faced by the banked gas.
The banked gas is the unused natural gas stored at the Malampaya gas reservoir in which part of the sale proceeds will go to the Philippine government. Under the current contract, delivery of the banked gas will last up to Feb. 23, 2024, the time when the existing contract will end.
At present, the Philippine National Oil Co. (PNOC) estimates 97.67 petajoules of banked gas is left from a total of 108.6. A petajoule is equivalent to 278 gigawatt hours of electricity.
Erguiza said the DOE is also preparing a public consultation on a department circular that would avoid similar legal questions involving the ownership and operatorship of the Malampaya resource such as the ones raised when Udenna Corp’.s UC Malampaya took over the 45-percent stake of Chevron Philippines Ltd.
Erguiza said at present, there are no set rules governing the sale of shares of stocks.
