Lotilla assesses Malampaya’s capacity to continue operations

By Myrna M. Velasco – December 13, 2022, 2:17 PM
from Manila Bulletin

With highly anticipated license extension to be granted by the government, Energy Secretary Raphael P. M. Lotilla visited last week the Malampaya gas production platform to assess its condition and check its viability for stretched life cycle of gas production.

The 25-year Service Contract (SC) 38 for the Malampaya project will expire on February 23, 2024; and the gas field is also currently at its depleting state; thus, the only way forward is for the State to grant its bid for license extension.

When that is done, it is only by then that fresh round of seismic survey and well drilling can be executed to gauge if there would still be gas that can be extracted from the field in the years ahead.

In a statement to the media, it was indicated that Lotilla’s visit was spearheaded by Prime Infrastructure Capital Inc. (Prime Infra) of the Razon group, which owns the 45-percent operating stake in the Malampaya venture.

Prime Infra President and CEO Guillaume Lucci noted that the energy chief’s visit to the gas platform is aligned with the goal “to sustain the operations of Malampaya at a time of great energy insecurity.”

Lucci said the company is “committed to deliver outstanding operational performance and further the potential of SC38 covering the Malampaya project to ensure the continuity of gas production as long as the reserves can accommodate it.”

Under the new Malampaya operator’s plan is the drilling of three new wells that could potentially reinforce the field’s gas production in the years to come with fresh capital requirement of $180 million to $300 million.

Citing the country’s critical path to energy transition, Lucci qualified that Prime Infra is aiming “to contribute by doing all that can be done to generate as much power as possible to keep up with the energy demands in Luzon.”

“The most important thing to do for the company right now is to sustain and expand gas production while we address the license extension for SC38.”

The workforce operating the Malampaya field has been a “Filipinized team”, led by Prime Energy General Manager Sebastian Quiñones, who also previously served as managing director of SPEX when Malampaya was still under the operatorship of Shell.

Quiñones stated that with Lotilla’s site visit, the energy chief was able “to confirm the alignment of the goals of the DOE (Department of Energy) and the Malampaya project regarding its continued operation.”

DOE officials previously conveyed that Prime Infra, as a new operator of the gas field, was required to submit a four-year work program to justify its application with the government for a license extension.

As had been assessed, the gas field’s for additional output could top 1.0 trillion cubic feet of gas that can be realized by drilling additional areas covered by the consortium’s block.

Based on initial data, the “commercial gas potential” may still be discovered in the Malampaya East, Iloc, Nido and the Linapacan plays which are all within the coverage of the field’s existing service contract.