Prime Energy Resources Development B.V. (Prime Energy) of businessman Enrique Razon Jr. has awarded a contract to One Subsea (of the Schlumberger group) for the supply of wellheads, christmas trees (Control Equipment), and subsea production system by the end of 2024 for the Malampaya Phase 4 drilling.
Prime Energy plans to drill and tie-in two new deepwater wells in the Camago and Malampaya East fields to the Malampaya Shallow Water Platform in 2025 with the aim to deliver new gas by 2026.
Prime Energy Managing Director and General Manager, Donnabel Kuizon Cruz said the SC38 consortium is committed to ensure that the benefits of Malampaya continues to be enjoyed by the Filipino consumer, and its support of the Department of Energy’s drive to develop the country’s indigenous oil and gas resources.
“Exploration and development of a late-life gas field like Malampaya requires extraordinary feats of engineering, which we are committed to deliver safely. We want to help ensure that Filipino consumers continue to enjoy stable and predictable electricity prices, a protection that we wish to continue offering for the long-term, for the country,” Cruz said.
The company is also set to award other major contracts (Deepwater Drilling Unit, Specialized pipeline manufacturing, Integrated Well Services, etc.) subject to partner approval by UC38 LLC and PNOC Exploration Corp. in the coming weeks.
The project successfully passed an external independent review on February 22, the Estimate Schedule Analysis Review (ESAR), which concluded that the project’s schedule estimate is sound.
Prime Energy also plans to drill a third well, called Bagong Pag-asa, as part of the 2025 drilling campaign, subject to partner approvals to determine the presence of oil and gas in a structure approximately 15 km from Malampaya, hopefully to further extend the flow of indigenous gas for the benefit of the Philippines.
It said a complex project of this nature has not been done for more than a decade as Service Contract No. 38 has only been renewed by the government in April 2023.
It said that with just enough time left before depletion of the current wells, and at a time when drilling projects around the world are concurrently being executed driving project costs up, the accelerated pace of Malampaya Phase 4 project is unprecedented, a feat only possible due to the capability and experience of the Prime Energy team.
Prime Energy said this renewed cycle of exploration and development activities by SC38, while production from an ageing asset is in decline, calls for a temporary recalibration of Malampaya pricing, to ensure sufficient funding for the drilling project, extend the life of the Malampaya facilities, safe and reliable operations, and maintain economic returns to the government and SC38 Consortium.
The Malampaya project has remitted over $13.5 billion to the government from the start of its commercial operations in 2001.
Prime Energy is a subsidiary of Prime Infrastructure Capital Inc., is a natural gas exploration and development company.
It owns a 40-percent participating interest, and is the operator of, SC 38, or the Malampaya deep water gas-to-power project, supplying about 20 percent of Luzon’s electricity requirements.