THE Department of Energy (DoE) said on Tuesday that the Malampaya gas field concession, known as Service Contract 38, is currently under review by the Office of the President in the wake of an application to extend the concession.
In a statement, the DoE declined to elaborate on the extension application while the Palace is evaluating it, other than to say: “the Philippine government retains at all times its full control over all aspects of gas and oil exploration and development. The service contractor is exactly that: Contractor.”
Prime Infrastructure Capital, Inc. (Prime Infra) is seeking a 15-year extension for the concession, which is set to expire next year.
Prime Infra, through its subsidiary Prime Energy Resources Development BV (Prime Energy) is a member of the Malampaya consortium operating SC 38.
Prime Energy holds a 45% stake in the Malampaya project. The other members of the consortium, UC38 LLC and PNOC Exploration Corp., own 45% and 10% stakes, respectively.
The DoE described the Malampaya project as a successful public-private partnership.
“PD (Presidential Decree) 87 embodies an early example of public-private partnerships (where the private sector bears all the risk) and, in the case of the Malampaya deepwater Gas-to-Power Project, a successful one,” the DoE said.
PD 87 governs the development of the petroleum industry, and introduced the service contracting system, through which blocks of Philippine territory are allocated to private parties for exploration.
Last week, Prime Infra President and Chief Executive Officer Guillaume Lucci said the company is optimistic about the Malampaya gas field and expects to extract gas from a new well by 2026.
The Malampaya project supplies power plants on Luzon which account for 20% of the Philippines’ power requirement. — Ashley Erika O. Jose