Govt seeks higher share from Malampaya

The government wants a higher revenue share from the Malampaya natural gas field, as the consortium operating the multi-billion-peso project seeks to extend its license.

The Energy Department asked the consortium operating the Malampaya gas field to come up with a new revenue sharing scheme that would be beneficial to both the government and the investors.

“I don’t have a problem with the extension. However, the terms cannot be the same. Everything has been cost-recovered, why would it be the same?” Energy Secretary Carlos Jericho Petilla told reporters at the sidelines of the launching of SM North Edsa solar power facility in Quezon City.

The Malampaya consortium’s license over service contract 38 northwest off Palawan will expire in February 2024.  The consortium, led by Shell Philippines Exploration B.V., asked the department for an extension of the service contract to enable it to conduct more exploratory drillings.

Petilla said Spex was asking for the “same terms” enjoyed by the consortium at present, but he said Spex should make a new offer and the government would evaluate it.

He said Spex “can drill something fast,” but has not conducted any additional exploratory drilling “because there’s no [license] extension.”

“Just because you’re going to drill, means it will have extension, the same terms. No you have to change it. They cannot drill if they also don’t have a contract [extension],” the energy chief said.

Petilla said the government was also weighing its options, such as the cost of government hiring a new contractor to operate the Malampaya facility once the consortium’s contract lapsed.

“I’m just trying to maximize what the government can get. Naturally, they [Shell] also want to maximize their profit... Maximization of profit or maximization of what we can get from Malampaya,” he said.

The life of the Malampaya gas field, operated by the consortium of Spex as operator with 45 percent stake, Chevron LLC (45 percent) and PNOC Exploration Corp. (10 percent) is expected to end by 2030. To date, around half of the reserves at the Malampaya gas field were consumed.

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