2 days ago
7
Upgrade to High-Speed Internet for only ₱1499/month!
Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.
Visit Suniway.ph to learn
For years, Malampaya has been like a reality show where nobody knows if there's still gas left—just a lot of suspense and expert "guesses." But this year, the season finale may finally drop—and it's interesting to see if we'd struck energy gold or we're up for a frustrating plot twist.
The upcoming drilling isn't just about hunting for more gas; it's also the ultimate proving ground for Prime Energy Resources Development B.V., the new operating entity for Malampaya, to prove it has the technical chops to not only tap into what's left but also to stretch the field's operating life cycle.
Last year, Razon-led Prime Energy made a major announcement that its highly anticipated drilling campaign would commence this year—with the targeted three well drilling poised to begin as early as May or June—so that's just roughly a month away from now. Yet, as the clock ticks toward the targeted start, the field operator remains conspicuously muted as to its next move—leaving everyone to wonder if the silence is strategic… or a sign of something deeper brewing beneath the surface.
To push forward with its drilling program, Prime Energy previously locked in a $69.9-million contract with American firm Noble—enabling it to deploy its "Noble Viking" subsea vessel for the scheduled drilling of at least three new wells—two aimed at shoring up production across the Camago and Malampaya East fields; and the third well drilling targeting the uncharted depths of the Bagong Pag-asa block, 15 kilometers (km) north of Malampaya.
When President Marcos signed the 15-year extension of Service Contract (SC) 38 for the gas field in 2023, the Department of Energy (DOE) announced that the new Malampaya consortium would inject over $600 million in fresh investment to reinvigorate the gas field—with additional wave of production hitting by 2026.
To recall, the original Malampaya consortium—made up of global energy multinationals Shell and Chevron alongside state-run PNOC-EC—had previously assessed the field, and the outlook was rather grim. Before the exit of the two major shareholders, they were already describing the field as "depleting," with its commercial yield expected to flatline by 2026 to 2027. Yet with the new round of drilling on the horizon, there might still be a chance for a last-ditch discovery that could turn the tide and prove the field isn't quite finished yet.
Alongside that then comes the true test of grit and legacy for the new Malampaya consortium members: to not just inherit a critical energy lifeline but to demonstrate their operating worth on it—because that asset isn't just a mere infrastructure, it's the backbone of the nation's fight for energy independence.
Gas in the equation for energy transition
Looking ahead, extracting new gas at Malampaya or scaling up liquefied natural gas (LNG) imports won't just fuel a reliable grid—it'll be the stabilizing force behind an ambitious energy transition, as the country braces for a surge of variable renewables onto a fragile power system that can't afford to falter.
Gas is the key to balancing the grid amid the unpredictability of solar and wind—and for the Philippines, tapping new reserves beyond Malampaya isn't just an option; it's essential to ensure energy security in a future dominated by renewables.
However, the roadblocks in our other petroleum prospects are as clear as the waters we can't drill. Diplomatic strife with China in the West Philippine Sea has already sunk drilling plans at Recto Bank under SC 72 and stalled SC 75 in northwest Palawan basin, leaving PXP Energy Corp. of the MVP Group and the nation's energy hopes stranded in contested territory.
On April 6, 2022, PXP subsidiary Forum Energy was forced to pull the plug on its exploration at SC 72 and SC 75, following a suspension order from the Duterte administration's Security, Justice, and Peace Cabinet cluster—a move widely seen as bowing to rising diplomatic heat from Beijing, and, somehow, that essentially sidelined energy security goals in favor of geopolitical caution.
Roughly three years have slipped by since the drill bits went silent at Recto Bank, and the government still can't chart a course back—despite the block's widely perceived potential to rival, if not replace, Malampaya as the country's next cornerstone of commercial gas supply.
And if the country fails to extract enough gas to fuel its energy transition, there's also a backup plan. Under the new Philippine Downstream Natural Gas Industry Law signed by President Marcos last January, the country is aiming to position itself as an LNG trading and transshipment hub in the Asia-Pacific region. But even ambition also needs a backbone, and without full-scale infrastructure development across the value chain, everything will just be an illusion or false front.
Then as global energy policies shift, the Philippines can't also afford to ignore the seismic effects of the Trump administration's "Drill, Baby, Drill" policy—that amid radical tariff impositions in some markets, the United States (US) is eyeing to flood markets with its oil and gas production.
These developments demand a deeper look at how they'll ripple through the LNG industry, particularly in Asian markets—because even after Trump's four-year lease on power ends, the aftershocks of his energy strategy may still cascade through markets long after he's gone.
For feedback and suggestions, please email at: [email protected]
