THE Philippine National Oil Company — Exploration Corp. (PNOC-EC) has projected a high success rate for new wells to be dug up by the Malampaya consortium.
During the budget hearing of the Senate sub-finance committee last Friday, PNOC EC president Franz Josef George Alvarez said the consortium, led by operator Prime Energy Resources Development B.V., will drill two new wells in 2025.
Service Contract 38, which covers the Malampaya gas field, has been renewed for another 15 years and required the consortium to explore and drill at least two new deep-water wells in the first phase of its work program for 2024 to 2029.
It is designed to unlock the potential of both the existing Malampaya gas field and nearby areas.
Alvarez said preparations for actual drilling are ongoing.
“By 2025, we will drill two additional wells,” he told the Senate subcommittee. “If successful, by 2026 we will have additional production. The probability of success is around 80 percent.”
The Malampaya consortium is composed of Prime Energy, a subsidiary of Razon-led Prime Infrastructure Capital, Inc. (Prime Infra), UC38 LLC and PNOC-EC. Prime Energy has a 45 percent stake in the consortium.
Alvarez said the consortium is expected to invest at least $690 million in further exploring the remaining gas deposits in Malampaya.
Prime Energy and its personnel have shown technical competence in managing the decline in gas supply and completing an accident-free maintenance program in Malampaya.
PNOC-EC, as part of the consortium, will spend some P3.45 billion on the work program.
Alvarez said the total cost of the program is estimated to be $690 million spread over three years–2023 to 2026.
PNOC-EC’s share in the expenses, according to Alvarez, is 10 percent.
The Malampaya project is one of the country’s most important power assets, feeding natural gas to power plants in Batangas City that account for 20 percent of Luzon’s total energy requirement.
The renewal of SC 38 is a key development for the country’s national energy security and independence.
The current best estimate for the near field is an additional 210 billion cubic feet of gas.
The consortium has remitted to the national government more than $13.14 billion from October 2001 to December 2022 as net proceeds from Malampaya.
During the hearing, PNOC-EC proposed a budget of P11.94 billion for 2024. At least P2.02 billion is for continuing Malampaya operations.
