The remaining potential yield of the Malampaya gas production facility could go as high as 1.6 trillion cubic feet (TCF), or half of the current capacity of the field that is now being funneled for the requirements of more than 3,200 megawatts of gas-fired power capacities in the country.
That has been based on estimates and data submitted by the consortium-members of Service Contract (SC) 38 to the Department of Energy (DOE), according to Energy Assistant Secretary Leonido J. Pulido III; with him emphasizing that the gas facility may still be able to provide the country’s indigenous gas needs until year 2027.
The energy official said the estimated capacity of the gas field until the end of its contract in 2024 could reach as high as 3.0TCF. As of August 2020, gas yield from Malampaya already hovered at 2.322TCF.
And based on the initial evaluation of seismic data of the SC 38 members, the residual gas that could still be extracted may reach 1,600 billion cubic feet or 1.6 TCF, the energy department has affirmed.
In a Senate hearing, Shell Philippines Exploration B.V (SPEX) Managing Director Don Paulino noted that “while the potential of SC 38 is not that big compared to the original size of Malampaya, we see some potential in further extending the life of Malampaya to actually allow us to bridge future exploration opportunities that can or may happen across the West Philippine Sea.”
He added “we’re seeing some developments in the Camago field, but we’re also seeing some further developments that we can do within the Malampaya field itself.”
The Shell executive qualified though that the success rate of the prospective gas yield would still need validation through actual drilling of wells – and eventually, the output may have a success rate ranging from 20-percent to 80-percent.
For that reason, he emphasized that for the targeted gas production to be concretized, there is really a need first for SC 38 license to be extended; and for the government to give subsequent go-signal on the drilling of wells.
“Now, what we need is to do further study and assess the risks associated with that together with our joint venture partners. And at the same time, with the approval of the DOE, through the license extension, we start doing some investments to allow us to actually start doing drilling,” Paulino stressed.
It is paramount that the investments be infused this early and for the license extension to be decided with more definitive timeframe by the government, he said, because the SC 38 investors would likewise need to pace cost recovery in case well drillings will not turn out to be of commercial scale.
“Because until we drill, we would not know whether there’s really gas or oil underneath, that’s the challenge of being an operator,” the SPEX executive noted.
And for the company to really decide on additional capital spending for exploration within Malampaya plays, “we need some clarity in the fiscal terms. At the same time, the longevity of the contract we will have with the government, that’s why the license important is quite important for us,” he stressed.