The Philippines may experience regular power outages unless the country beefs up its oil and gas reserves and push for energy independence in the next few years, several expert studies showed.
“The growing population is driving electricity consumption in the Philippines. As a result, new investment in capacity addition is urgently needed,” said GlobalData power industry analyst Harshavardhan Reddy Nagatham.
Studies have shown that the country’s oil and gas reserves are steadily declining, driving greater reliance on imports.
The problems in the country’s oil and gas exploration initiatives only make the situation worse as investors have been taking a wait-and-see stance due to currently unresolved issues that pit the government auditors against the Department of Energy.
According to a report done by First Solutions Macro Research, a unit of the Fitch Group, the energy department has placed the country’s oil dependency at a hefty 48 percent.
The report likewise noted that dependency is expected to increase in the coming years.
“The Philippines remains in dire need of more oil and gas exploration as existing reserves decline and as its sole producing Malampaya gas-to-power project approaches the end of its production life.”
The Malampaya project accounts for 98 percent of domestic oil and gas production.
However, the Malampaya field is expected to start producing less gas in five years’ time, although the consortium behind the project is confident of extending the life of the gas field—underscoring the need to extend the Malampaya license beyond 2024 to help beef up the country’s energy reserves.
International arbiters have recently ruled in favor of the DOE-Malampaya consortium in its legal battle with the Commission on Audit, a development that bodes well for the influx of more foreign investment on oil and gas explorations into the country.
