Invoking the country’s “energy security,” Senator Sherwin Gatchalian pressed the Department of Energy (DOE) to bare plans for the Malampaya power project following divestment of its operator Shell Philippines Exploration B.V. (SPEX) in the face of imminent expiration of Petroleum Service Contract (SC) 38 for the Malampaya deep water gas-to-power project.
Gatchalian, chairman of the Senate Committee on Energy, stressed in a news statement issued on Friday the need to ensure the “future of its operations and the continuous supply of energy” in the country.
“Given the significant role that the Malampaya project plays in the Philippines’s energy security, it is imperative that the DOE apprise the Filipino public on Malampaya’s operations—the remaining natural gas reserves and the government’s plans for continuous energy supply, likewise on the pending request for the extension of SC No. 38,” the senator said.
In filing Resolution No. 724, the Senate mandated Gatchalian’s Committee on Energy to look into the status of the sale of the stake of SPEX and the basis for DOE’s decision if it approves the sale. Moreover, he added, the inquiry will inform the panel on the DOE’s direction amid the looming expiration of Malampaya’s service contract barely three years from now.
Gatchalian recalled that last September, the SPEX announced plans to put up for sale its 45-percent interest in the Malampaya project.
At the same time, he noted that Chevron Malampaya LLC, the other holder of the 45-percent interest, sold its stake to UC Malampaya Philippines in March last year, adding that completing the consortium is the state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC) which has the minority interest of 10 percent.
The senator affirmed “it is critical for the DOE to ensure that whoever gets hold of Shell’s interest should have, not just similar experience or capacity, but more so the technical, financial and legal capability to operate the Malampaya project or to be a service contractor.”
Moreover, Gatchalian reminded it is incumbent on the DOE to ensure that the transfer of interests of the members of the consortium should “go through a comprehensive review and evaluation” pursuant to the requirement imposed by existing Presidential Decree (PD) 87.
He further affirmed the Malampaya Project became the country’s “most significant oil and gas upstream development” providing 19.16 percent of the country’s power supply, as well as a “crucial source of income” for the government with a total net national government share amounting to P261,681,610,752.59 since it began commercial operations in 2002.