The Udenna Corp. subsidiaries that are set to control the Malampaya deepwater gas-to-power project plan to hold drilling activities aimed at increasing reserves and extending the gas field’s lifespan.
In a statement on Wednesday, Malampaya Energy XP Pte. Ltd. and UC38 LLC – collectively the Malampaya Energy Group – said: “At the core of [our] program is the planned drilling campaign in the SC (service contract) 38 license area to add reserves and extend the life of the asset.”
The group added that it would evaluate well and production enhancement technologies, which could improve recovery from the main Malampaya field.
Belinda C. Racela, the group’s top executive, said the companies would draw on “proven rejuvenation” strategies that successfully increased production and extended the lifespan of mature and divested oil fields in other countries.
“There is a brilliant, highly motivated and experienced team in place at Malampaya that can make this happen when we support them with the right, highly specialized technical experts and contractors,” she said.
Department of Energy estimates show that the Malampaya gas field is set to be completely depleted by the first quarter of 2027.
Malampaya Energy, a unit of Dennis A. Uy-led holding firm Udenna, seeks to fully acquire the stake of the gas field’s operator Shell Philippines Exploration B.V. (SPEx).
His group of companies said they are prepared to ramp up investments in new exploration and production enhancement technologies.
“There are a range of innovative new production enhancement tools and techniques that have emerged in recent years that have never been applied at Malampaya,” Ms. Racela said.
“We now have a window of opportunity to increase production while simultaneously exploring for new resources in the SC38 license area. There is potential to breathe new life into the Malampaya field if we act quickly and decisively,” she added.
Ms. Racela is also the president of UC38 LLC, which owns a 45% stake in the offshore gas field that supplies 20% of the country’s energy needs.
Malampaya Energy Group describes itself as a 100% Filipino-owned business led by a qualified team of energy professionals who have worked with Shell, Chevron and ExxonMobil.
In May, SPEx announced that it had signed an agreement for the sale of 100% of its shareholdings in the project to Malampaya Energy XP. The deal comes after SPEx said in September last year that it was selling the stake.
The base consideration of the SPEx sale is $380 million, with additional payments of up to $80 million from 2022 to 2024 depending on asset performance and commodity prices.
The agreement is projected to be completed by the end of 2021, and is contingent on partner and regulatory consent.
SPEx holds a 45% interest in SC 38. State-led Philippine National Oil Co.-Exploration Corp. holds the remaining 10%. — Angelica Y. Yang
