Vice President and presidential aspirant Leni Robredo recently cited a projection that the country’s energy supply would dry up by 2024 and mentioned the Malampaya gas field in the same breath. The statement needs context as it was unclear whether she was referring to the expiration of Malampaya's contract or expected supply depletion.
Malampaya, a deepwater energy source located off northwest Palawan, produces an average of 429 million cubic feet of natural gas daily. It generates about 20% of the country’s electricity by supplying five power plants in Luzon.
Describing a projected energy shortage at the Feb. 27 CNN Philippines presidential debate, Robredo said at the 2:00:07 mark:
‘Yung ating supply ng kuryente kailangang asikasuhin na natin. Alam natin na by 2024 ‘yung Malampaya—talagang paubos na yung ating source of energy (We need to address our electricity supply. We know that by 2024, Malampaya—our source of energy is about to run out).
Service Contract No. 38, an agreement allowing a consortium between Shell Philippines Exploration B.V. (SPEx), Udenna Corp. and the Philippine National Oil Company Exploration Corp. to develop and operate the Malampaya gas field, will expire in 2024. Robredo mentioned the year in the debate.
Meanwhile, a 2018 report from the Department of Energy said Malampaya’s gas reserves are projected to gradually decline beginning this year and will run dry in 2027. Robredo made reference to Malampaya but not 2027 in the debate.
However, the DOE did estimate in 2012 that Malampaya’s energy supply would be depleted by 2024. That projection held until the drilling of additional wells in 2013 and construction of a new platform in 2015 extended its supply by at least three more years.
Recently, though, Energy Secretary Alfonso Cusi told a Senate budget hearing that Malampaya’s energy production had started dropping by 13% in 2020, two years earlier than DOE’s estimates.
SPEx, under SC 38, discovered the Malampaya gas field in 1991 and has been in control of its operations since it opened in 2001. In 1999, U.S.-based Texaco acquired a 45% interest in the Malampaya project while state-owned PNOC-EC got a 10% stake a year after.
Texaco merged with oil company Chevron in 2000, eventually taking control of its Malampaya stakes.
In 2020, Udenna Corp., through a subsidiary, bought Chevron’s interest in the gas field for $565 million. Udenna is owned by Dennis Uy, a close friend and campaign contributor of President Rodrigo Duterte.
Udenna went on to purchase SPEx’s 45% Malampaya shares for $460 million in 2021. The sale went in limbo after PNOC-EC blocked the deal.
Robredo earlier slammed Udenna’s leveraged buyout, insisting that the government should have bought Malampaya instead.
Uy, Cusi and other Malampaya executives are facing graft charges in the Ombudsman for alleged anomalies in Udenna’s takeover of the nation’s biggest natural gas resource. (Tinig ng Plaridel)