MANILA, Philippines – The operator of the Malampaya deep water gas-to-power project off Palawan turned over US$1.1 billion in royalties to the Philippine government on Thursday, February 21.
Finance Secretary Cesar Purisima received a symbolic check for the amount from Shell Philippines Exploration BV, which runs the project on behalf of joint venture partners Chevron Malampaya LLC and state-owned PNOC Exploration Corp.
Malampaya is located 80 kilometers northwest of Palawan Island, and it supplies 2,700 megawatts or up to 45% of Luzon’s power requirements.
“Malampaya continues to benefit the country by providing much needed government revenue, and clean energy to power the lives of millions of Filipinos,” said Sebastian Quiniones, Shell Philippines Exploration Managing Director.
The Malampaya partners will now proceed with the next phases of the project. They will drill two production wells and install a second platform for additional compressors, said Quiniones. These will “maximize the recovery of natural gas” from the reservoir, he added.
The government received the royalties amid controversy over the use of Malampaya funds.
A Senate probe into alleged irregularities in the use of the funds in Palawan was launched in January. Concerned citizens reported in a letter to the Senate blue ribbon committee in October that road projects supposedly funded by Malampaya proceeds in Palawan were overpriced and substandard.
The law provides for a 60-40 revenue sharing between the national government and Palawan in Malampaya, but Palawan’s claim was disputed in court.
While the case was pending, the Arroyo administration signed an executive order that allowed the release of Palawan’s share. – Rappler.com