Malampaya turns in P311-B revenue share to government
By Myrna M. Velasco – November 15, 2020, 6:30 AM
from Business Mirror
The Malampaya deep water gas-to-power project had already turned in P311 billion worth of revenues to the Philippine government since the start of its commercial operations, according to Senate Committee on Energy Chairman Sherwin T. Gatchalian.
Senator Sherwin Gatchalian (MANILA BULLETIN FILE PHOTO)
Energy Assistant Secretary Leonido J. Pulido III reaffirmed such scale of remittances already made by the gas field facility to the State coffers; and he specified that the remittances amounted to at least P17 billion annually.
The 60-percent royalty share of the Philippine government from that upstream gas venture is anchored on the provisions of Presidential Decree (P.D.) 87 or the Oil and Gas Law of the Philippines; which sets the higher revenue share in favor of the State; while the 40-percent is the share of the contractor.
In re-evaluating the country’s bid for energy security, Gatchalian noted that aside from the gas fuel extracted from the Malampaya field to run power plants, it is also paramount to look at the contribution of this project in shoring up the financial resources of the State.
In terms of production, the lawmaker emphasized that what should be assessed is the anticipated decline in natural gas output of the field and probable depletion by year 2026 or 2027. And prior to that or in year 2024, the expiration of Service Contract (SC) 38 which is the field’s operating license.
The Malampaya gas field uses an innovative and sustainable deepwater technology for recovering natural gas
from the deepwater reservoir in northwest Palawan. ( note: image from shell.com – google)
Another major concern, he noted, is the impending divestment of the 45-percent interest of Shell Philippines Exploration B.V. (SPEX), which is the current operator of the gas field.
In Gatchalian’s view, “we have to make sure that whoever takes over the portion of Shell would have the technical capability.”
He emphasized the buyer of the gas field’s interest must be able “to demonstrate that they can operate this rig competently with technical expertise, and in the future, if ever there is potential, they should be able to show that they can explore and develop that area.”
Gatchalian thus noted that the citizens of this country “deserve to understand whether the new owners can assure us of energy security.”
He added the inquiry recently carried out by the Senate targets to unravel the eccentricities of the transaction relating to the divestment of current shareholders in Malampaya; how this will affect the country and what is the remaining resource discovery potential within the SC 38 plays. “There are talks that SC38 might have other potential wells, so we will look into that, as well as who will explore those potential wells,” the lawmaker stressed.
