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Manila Bulletin devider Business devider PNOC seeks P6-billion supplemental budget to fill in prospective investment gap in Malampaya

PNOC seeks P6-billion supplemental budget to fill in prospective investment gap in Malampaya

Published Aug 10, 2024 03:36 am

At A Glance

  • The drilling of the new wells is regarded as a major step to finally determine if additional gas can still be extracted from the Malampaya field – and that is tied to the 15-year extension granted by the Marcos administration to the project's Service Contract (SC) 38 stretching from 2024 to 2039.

State-run Philippine National Oil Company (PNOC) is seeking the allocation of P6.02 billion supplemental budget so it can have ready financial capacity to cough up investment in case one of the consortium-members in the Malampaya gas field project would face snags in its capital contribution to the planned new drilling of wells.

PNOC President and CEO Oliver B. Butalid told Congress that the requested additional budget will serve as a ‘contingent investment fund’ and will be sourced from the company’s internally generated fund.

“This will enable PNOC to respond to any eventuality that might affect any of the Malampaya consortium-partners’ ability to fund the exploration and development work program of the new new Malampaya wells in 2025,” the PNOC chief executive stressed.

It was not specified though which of the consortium-members will likely face predicament in the ‘cash call’ for new well drillings and exploration activities that are slated at the Malampaya field next year.

The current Malampaya interest-holders are Prime Energy Resources Development B.V. of the Razon group, which also holds the operatorship in the gas field; then UC38 LLC of the Udenna group of businessman Dennis Uy; while the minority shareholder is PNOC subsidiary Philippine National Oil Company-Exploration Corporation (PNOC-EC).

By far, PNOC-EC Vice President for Management Services Division Candido Magsumbol indicated that “for Malampaya, we continue the production and sale of natural gas and condensate,” adding that “we have programmed the drilling of two commitment wells to extend the production life of Malampaya.”

Malampaya field operator Prime Energy conveyed early this year the engagement of American firm Noble for the planned drilling of at least three new wells to reinforce gas production at the depleting field – and the worth of that particular contract had been placed at $69.9 million.

It was similarly announced that Texas-based ‘Nobel Viking’ drillship had been tapped for the drilling of the two initial wells – and that component of the consortium’s work program had contract procurement worth $45 million.

The drilling of the new wells is regarded as a major step to finally determine if additional gas can still be extracted from the Malampaya field – and that is tied to the 15-year extension granted by the Marcos administration to the project’s Service Contract (SC) 38 stretching from 2024 to 2039.

The energy department previously stated that the scale of investments to be injected by the Malampaya consortium would reach as much as $600-$660 million if additional commercial scale gas discovery will eventually be lifted from the near-fields of Malampaya.

Related Tags

Malampaya gas field Udenna Corporation Philippine National Oil Company Prime Energy well drilling
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