Due to its critical role in the country’s security, Senator Win Gatchalian on Wednesday sought a Senate probe on the depleting supply of the Malampaya gas field with the looming expiration of Service Contract 38, or the Malampaya Deep Water Gas-To-Power Project.
Gatchalian, along with Senate President Vicente Sotto III and Senator Panfilo Lacson, filed Senate Resolution 533 citing the need for Congress to be apprised of the government’s plans for SC 38.
Given its declining output, Gatchalian said, one of the issues facing Malampaya included whether or not it should be extended or the government should opt to manage and operate it.
“This is not a plain and simple business transaction. It affects all of us because of energy security issues. We want to be assured that we will not run out of fuel supply in the immediate future,” Gatchalian said.
Senator Christopher Go urged the energy sector to ensure the welfare of Filipinos is given priority over profits especially amid the pandemic.
Senator Risa Hontiveros secured the commitment of officials from the ERC that power distributors like MERALCO would extend their “no disconnection policy” for defaulting power consumers up to the end of the year.
Energy officials reported that power distributors like MERALCO were set to relax their deadlines for issuing notices of disconnection and cutting power supply for the families unable to fully pay their power bills.
Gatchalian also wants to look into the compliance of the government and the consortium with Presidential Decree 87, or the Oil Exploration and Development Act of 1972, and the impending sale of the 45 percent stake of Shell Exploration B.V. that is also crucial since SPEX is the operator of the platform.
Aside from the 10 percent stake of the Philippine National Oil Corporation-Exploration in Malampaya, the 45 percent stake previously held by Chevron is now under Udenna Corporation’s subsidiary, UC Malampaya Philippines.
“We’re looking at the larger picture, which is the energy security of the country. So we have to make sure that whoever takes over that portion of Shell should have the technical capability,” Gatchalian said.
“They should be able to demonstrate that they can operate this rig competently with technical expertise and in the future, if ever that area has potential, they should be able to demonstrate that so they can explore and develop that area.”
Gatchalian cited Section 4 of PD 87 that says the government may directly explore for and produce indigenous petroleum and may also indirectly undertake the same service contracts, provided that the contractor is technically competent and financially capable to undertake the operations.
Located approximately 50 kilometers northwest of Palawan, Malampaya is the country’s main domestic source of energy fueling five power plants as it accounts for 20.08 percent of power generation in the entire country and 29.3 percent of the power generation in Luzon.
It has likewise provided the government a total revenue of P261,681,610,752.59 from January 2002 to December 31, 2019, which is a crucial source of funding for various energy resource development programs and initiatives.
The surrounding areas of Malampaya are said to be rich in oil and natural gas, and exploring them at this point could prepare for oil production by the time its gas supply is depleted.