PNOC sees 80% success rate in drilling new wells by Malampaya Consortium

State-owned Philippine National Oil Company-Exploration Corp. (PNOC-EC) is projecting a high success rate for new wells to be drilled by the Malampaya Consortium.

“By 2025, we will drill two additional wells,” he told the Senate subcommittee. If successful, by 2026 we will have additional production,” PNOC-EC president Franz Josef George Alvarez said at a recent Senate hearing.

“The probability of success is around 80%,” Alvarez said.

The Department of Energy has earlier said the present best estimates for Malampaya's near field is about an additional 210 billion cubic feet of gas. 

The Malampaya Consortium, led by tycoon Enrique Razon’s Prime Energy Resources Development B.V., committed to investing about $600 million (roughly P33.7 billion) for further exploration and drilling activities beyond the existing production area within the Service Contract 38.

The consortium was mandated to explore and drill at least two new deep water wells during the first phase (2024 to 2029) of the work program under the 15-year renewed production contract.

Alvarez said the total cost of the program was estimated to be around $690 million.

In February, President Ferdinand Marcos Jr. signed the renewal agreement for the Malampaya SC 38, allowing the continued production of the gas field for another 15 years.

The SC 38’s 25-year production contract — set to expire on February 22, 2024 — was renewed until February 22, 2039.

Aside from Prime Energy, a subsidiary of Prime Infrastructure Capital Inc., other members of the SC 38 Consortium are Dennis Uy-led UC38 LLC and the state-run PNOC-EC.

Prime Energy is the operator and has a 45-percent stake in the project. UC38 also has a 45% stake, while the remaining 10% is owned by PNOC-EC.

The Malampaya gas-to-power project supplies natural gas to power four generation plants in Batangas —Santa Rita, San Lorenzo, San Gabriel, and Avion — with a combined capacity of 2,011 megawatts (MW).

From October 2001 to December 2022, the SC 38 consortium remitted more than $13.14 billion to the government.

The PNOC-EC proposed a budget of P11.94 billion for 2024, P2.02 billion of which is for continuing Malampaya operations. —KG, GMA Integrated News