Prime Energy sees production from new Malampaya wells by 2026

Tycoon Enrique Razon’s Prime Energy Resources Development B.V., the operator of the Malampaya natural gas facility, is fast-tracking its preparatory works to drill two new deep water wells at the offshore gas field in 2025

In a statement, Prime Energy said production from the new wells, namely Camago and Malampaya East, is expected in 2026.

The company said this would be possible “if the drilling is successful and proves that gas reserves can be produced commercially, the necessary pipelines will be installed and tied into the existing Malampaya production facilities.”

For her part, Prime Energy Managing Director Donnabel Kuizon Cruz said the planned drilling and development - called “Malampaya Phase 4” - would require an investment of more than $600 million.

For 2024 alone, the expenditure was estimated at $187 million, which would be spent on procurement of drilling equipment, subsea equipment and umbilicals, and pipelines, and securing the drilling rig.

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.

SC 38 is held by the Malampaya Consortium led by Prime Energy, along with UC38 LLC and the state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC).

Prime Energy said the renewal of SC 38 paves the way for new investment to explore and develop additional gas reserves.

To underpin the significant investment required, Prime Energy and its partners have sought the support of the Department of Energy (DOE) to ensure that there is a market for the new gas volumes and to streamline and simplify the permits and requirements imposed by various government agencies which could hamper the completion of Malampaya Phase 4 on time and within budget.

The DOE’s support will help to ensure the speedy and successful implementation of Malampaya Phase 4. — DVM, GMA Integrated News