More gas deposits may be found beneath our seas.
The Philippines is giving itself another shot at exploring and developing the natural gas industry.
Except for the Malampaya natural gas field off northwest Palawan, the Philippines has not achieved much success in striking commercial gas or oil deposits, inland or offshore.
In contrast, its Southeast Asian neighbors—Thailand, Indonesia and Malaysia—have well-developed indigenous gas industries that partially secured their energy requirements.
Senator Pia Cayetano, chairperson of the Senate committee on energy, has noted that from a high of over 100 exploration projects across the Philippines in the 1990s to early 2000, the number has fallen to nearly zero.
Foreign and local exploration companies are clearly not motivated to try their luck in the Philippines. The reason is not for lack of prospects. Geological surveys and scientific studies have shown that areas around Malampaya hold more gas than earlier thought.
The Malampaya natural gas field, though, is not the last and only reservoir in the Philippines. More gas deposits may be found beneath our seas.
Back in November 2011, ExxonMobil Corp., the largest oil exploration company in the US, spent about $500 million in drilling four natural gas wells over the vast Sulu Sea.
It subsequently withdrew from the exploration project in the Sandakan Basin near the Borneo border. ExxonMobil deemed its gas discovery of “noncommercial quantities.”
Nothing much has been heard from ExxonMobil since then. But new developments could lure the American company and other foreign explorers back to the Philippines. Middle East companies this early are keen on exploring the Sulu Sea again for oil and gas.
Rebirth
President Ferdinand Marcos Jr. is paving the way for the renaissance of the local natural gas industry. He has extended the life of Malampaya’s Service Contract 38 by 15 more years.
The directive gave current Malampaya operators, led by Prime Energy Resources Development B.V. of business tycoon Enrique Razon Jr., more elbow room to increase Malampaya’s production and tap new potential gas fields around it.
The Malampaya field, which supplied more than a fourth of the country’s energy needs and generated billions in government revenue at the same time, is expected to be depleted by 2027.
After extending the life of SC 38, President Marcos encouraged lawmakers to address the concerns that had previously deterred potential investors from exploring additional gas deposits near Malampaya. The initiative aimed to reassure investors that their time and money would be well spent.
It led to the signing of Republic Act (RA) 12120, or the Philippine Natural Gas Industry Development Act on Jan. 8.
The new law, which Ms. Cayetano sponsored, seeks to establish the Philippine Downstream Natural Gas Industry and raise the share of natural gas in the country’s energy mix by promoting it as a safe, efficient and cost-effective source and an indispensable contributor to energy security.
“By enacting the Natural Gas Industry Development Act, we move closer to our vision of a more energy-secure Philippines that harnesses its own natural resources for the benefit of the Filipino people,” says Cayetano.
“With more than half of our energy requirements being imported, we are clearly vulnerable to geopolitical conflicts,” she adds.
RA 12120 offers incentives to boost investments in the Philippine natural gas industry by allowing the entry of investors under a system of competition, transparency and fair trade, and by providing responsive policy support.
Moreover, the new law will help the Philippines meet the increasing local demand for fuel and develop the country as a liquefied natural gas (LNG) trading and transshipment hub within the Asia-Pacific region.
The full development of the natural gas industry will reduce our dependence on fuel imports and partially secure the country’s energy requirements.
As a transition fuel, natural gas will ensure adequate power supply with sharply reduced pollution levels.
Credit must be given to Senator Cayetano for pushing the law. For weeks that led to the signing of the Philippine Natural Gas Industry Development Act, Cayetano has been patiently answering questions and dispelling doubts about the historic piece of legislation.
The new law has the potential to heavily reduce, if not eliminate, the country’s dependence on imported fuel and stabilize the cost of energy.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com