Senate may call inquiry to discuss post-Malampaya plans

SENATORS said they want to look into the government’s plan for Malampaya, the Philippines’ sole natural gas field, which is expected to be depleted within the next few years, posing problems for energy security.

The upcoming sale of the operating shares of Shell Philippines Exploration B.V. (SPEx) in the Malampaya gas-to-power project prompted Senators Sherwin T. Gatchalian, Panfilo M. Lacson, and Vicente C. Sotto III to file Senate Resolution No. 533 to examine the post-Malampaya outlook for energy.

“We’re looking at the larger picture which is the energy security of the country,” Mr. Gatchalian said in a statement Wednesday.

The Malampaya field off northern Palawan accounts for 3,200 megawatts of electricity and 21.1% of gross power generated in 2019.

According to estimates by the Department of Energy, the field’s reserves will be depleted by 2027.

SPEx operates the natural gas field under Service Contract (SC) 38 alongside Udenna Group’s UC Malampaya Philippines Pte. Ltd. and state-led Philippine National Oil Co.-Exploration Corp. (PNOC-EC).

The Senators will look into SPEx’s decision to sell its 45% operating stake. Last month, the exploration firm said it is looking to sell its share in the project in part of its rationalization efforts to keep itself afloat during the pandemic.

“As part of an ongoing portfolio rationalization to simplify and increase the resilience of its business, Shell is exploring its options with a view to divest its interest in SC 38,” SPEx General Manager Rolando J. Paulino said.

Mr. Gatchalian hopes that the next Malampaya operator will have the technical capability to run the field.

“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,” he said.

The Udenna Group in a statement two weeks ago called on the PNOC-EC to acquire SPEx’s share as it believed they are the “most suitable party” for it.

Both Ramon S. Ang’s San Miguel Corp. and companies controlled by Manuel V. Pangilinan expressed interest in buying the Malampaya shares.

Meanwhile, the senators wanted to discuss the consortium’s plan to extending the gas field’s life beyond the end of its contract by 2024.

“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,” Mr. Gatchalian said.

The proposed inquiry will also look into the compliance of the Malampaya consortium and the government with Presidential Decree No. 87, or the Oil Exploration and Development Act.

The Malampaya project has generated P261.68 billion in revenue for the government since 2002, becoming a major source of funding for various energy resource development programs and initiatives. — Adam J. Ang