MANILA, Philippines – President Ferdinand Marcos Jr. signed on Monday, May 15, the renewal agreement for Malampaya Service Contract Number 38 extending it for 15 more years to 2039.

The signing, which took place in Malacañang, was witnessed by key officials of the administration, including Executive Secretary Lucas Bersamin, Presidential Legal Adviser Juan Ponce Enrile, Justice Secretary Jesus Crispin Remulla, Defense Officer-in-Charge Senior Undersecretary Carlito Galvez, Communications Secretary Cheloy Garafil, and Energy Secretary Raphael Lotilla.

Senator Raffy Tulfo and the President’s cousin, House Speaker Martin Romualdez, witnessed the signing. Enrique Razon, chairman of Prime Infrastructure Capital, and Franz Josef George Alvarez of the Philippine National Oil Company – Exploration Corporation (PNOC EC), were also present at the ceremonial signing.

The production contract, which expires in February 22, 2024, is now extended to February 22, 2039.

The PNOC EC has a 10% interest in the project, alongside Prime Infra subsidiary‘s Prime Energy Resources Development B.V. with 45%, and Dennis Uy’s Udenna Corporation with 45%.

According to the Department of Energy (DOE), the service contract requires the following:

• geological and geophysical studies and the drilling of at least two (2) deep water wells during the Sub-Phase 1 from 2024 to 2029
• conduct of exploratory drilling further away from the Malampaya production area within the Service Contract
• submission of a Plan and Budget covering the abandonment of wells and decommissioning of facilities within 30 days of the renewal agreement’s effectivity.

“The discovery of additional reserves in the Malampaya gas field will boost the country’s quest for energy security. It is also expected to encourage opportunities for further exploration in the country, which to date remains underexplored, and to add to the Philippines’ energy portfolio,” said the energy department.

“Needless to say, this project will reduce our country’s dependence on oil imports and ensure a more stable supply of cleaner energy from an indigenous local source,” said Marcos in short remarks following the signing of the renewal agreement.

Malampaya supplies natural gas to power plants in Batangas City, contributing one-fifth of Luzon’s energy requirements. It started operations in 2001.

House Deputy Speaker Ralph Recto, who represents the 6th District of Batangas, called Malampaya gas as “a bulwark of our energy security,” fueling power plants in his home province and at one point provided 40% of the energy needs of the entire Luzon.

“The extension of the Malampaya Service Contract for 15 years not only guarantees our supply of that strategic fuel, but retains our presence in an area regarded as harboring big oil and gas deposits,” Recto said in a statement.

“Corporations require regulatory stability to put in more investments, and the extension of the contract provides the stable business climate that will ensure that this national resource will be harnessed for the greater good.” – Rappler.com

[ANALYSIS] Bakit problema mo rin ang Malampaya