Prime Energy Resources Development B.V. said Wednesday the Malampaya deepwater gas-to-power consortium remitted about $13 billion to the government since the project’s inception.
“The Service Contract 38 has generated and remitted to the Philippine government some $13 billion since its inception. Such a tremendous and strong source of government revenues and of course, we expect to continue this relationship,” Prime Infrastructure Capital Inc. president and chief executive Guillaume Lucci said during the Powertrends 2023 Forum.
Prime Energy, a subsidiary of Prime Infra controlled by businessman Enrique Razon, is the operator of SC 38 or the Malampaya gas project. Other consortium members are UC38LLC owned by the Udenna Group and state-run Philippine National Oil Company-Exploration Corp.
Lucci said Prime Energy is committed to continuing gas production in Malampaya, the country’s lone gas-producing asset.
“We’re here to stay, we’re here to invest, we’re here to increase dramatically the gas production with the extended term of the service contract and resource available, and, more importantly, we are trying to make sure we produce the least cost to consumers,” he said.
The Malampaya project produces natural gas for power plants in Batangas City that account for around 20 percent of the Philippines’ total electricity requirements.
It started operations in 2001 and the Malampaya consortium’s license is set to expire in 2024.
Prime Energy, which acquired Shell Philippines Exploration B.V.’s 45-percent stake in the project, asked the Department of Energy for a 15-year license extension to improve Malampaya’s declining gas output and develop nearby gas fields.
Prime Energy said the Malampaya asset is a significant addition to its growing energy portfolio.
“Our drop-dead day to produce new gas or new well is the first quarter of 2026, and we hope we can actually accelerate that as much as possible while doing it safely and reliably,” Lucci said.
Lucci also commended the government for ensuring that domestic oil and gas production increases “by attracting foreign companies to explore a number of service contracts and increase production of gas.”
The DOE is now reviewing the consortium’s contract extension request.
DOE director for energy policy and planning bureau Michael Sinocruz said the agency is reviewing Prime Energy’s Malampaya contract extension “for final approval.”
Energy Secretary Raphael Lotilla earlier said the review is crucial to the country’s energy security because the “present Malampaya-Camago field is a finite one.”