Discovering oil or gas in significant volume… is a rarity.
The new natural gas discovery in offshore Palawan Island is the first significant find in the Philippines over a decade.
And finding oil or gas in significant volume in the Philippines and other parts of the world is a rarity. The odds are low for a discovery and the exploration and drilling cost is enormous with no guarantee for success.
The news this week that the Philippines struck natural gas east of the Malampaya producing field is encouraging. It brought the country back in the global oil and gas exploration map.
President Ferdinand Marcos Jr. himself made the announcement. About 98 billion cubic feet of natural gas–enough to provide power to 5.7 million homes for a year–has been found east of the Malampaya gas field near the island of Palawan.
The latest discovery may pale in comparison with the proven reserves of the first Malampaya gas field. The original field had proven reserves of about 2.7 trillion cubic feet (TCF) of natural gas reserves and 85 million barrels of condensate.
Further tests and the drilling of more gas wells around the discovery field, however, could boost Malampaya’s natural gas production.
President Marcos said the volume at the Malampaya East 1 (MAE-1) was equivalent to roughly 14 billion kilowatt-hours of electricity annually.
“Initial testing showed that the well flowed at 60 million cubic feet per day. This indicates that the well has the potential to produce even more, confirming it is a high-productivity resource comparable to the original Malampaya wells,” he said.
President Marcos had a direct hand in the revival of Malampaya when he approved the extension of SC 38 contract and pushed the enactment of the Philippine Natural Gas Industry Development Act that provided the regulatory stability necessary for exploration.
MAE-1 is the first well under the Malampaya Phase 4 drilling program, which also includes the Camago-2 and Bagong Pag-asa wells.
Members of the SC-38 Consortium, led by Prime Energy Resources Development of port tycoon Enrique K. Razon Jr. and partners UC-38, PNOC Exploration Corp. and Prime Oil and Gas Inc., must have made a toast to celebrate the new gas find
“This gas discovery is a victory for the Filipino people,” Prime Energy said after the discovery. “When we assumed operatorship, we committed to the President and the nation to breathe new life into Malampaya and revitalize the indigenous natural gas sector. Today, we are delivering on that commitment.”
Energy Secretary Sharon Garin is bullish. The new field reinforces Malampaya’s status as the nation’s sole indigenous gas source, boosting the existing field’s remaining recoverable volumes by an estimated 30 percent.
Garin says the discovery of the significant natural gas reservoir at MAE-1 will unlock indigenous resources and strengthen the country’s long-term energy security.
“This milestone is a testament to the world-class capability of Filipino engineers in securing our country’s energy future… Natural gas is a critical bridge in our energy mix, supporting power reliability while we scale renewables, energy storage and grid upgrades,” adds Garin.
The Malampaya project is a critical asset for the national government under the Department of Energy. Since its inception, the Malampaya venture has generated over P812 billion in revenues for the Philippine government while reducing the country’s reliance on imported fuel.
The first Malampaya field may not be as huge as those found in the Gulf of Thailand, North Sea in northern Europe and the vast lands of Ukraine, Russia and the Middle East. But Malampaya’s output in LNG form has been instrumental in providing fuel to gas-fired plants in Southern Luzon.
Malampaya, thus, provides a certain degree of energy security to the Philippines. Besides, LNG is a much cleaner fossil fuel than oil and coal.
Developing our gas fields further, meanwhile, will protect us from the volatility of the world market for natural gas because the chances of supply disruption are real and not imagined, not to mention the higher freight cost of shipping imported LNG.
The full development of the natural gas industry will reduce our dependence on fuel imports and partially secure the country’s energy requirements, at least for the medium-term period.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com
