Surigao del Sur Rep. Johnny Pimentel urged the Department of Energy (DOE) to ensure the “seamless transfer” of Malampaya’s day-to-day gas business despite calls for an inquiry into the $460 million operator switch from Shell Petroleum B.V. to Udenna Corp.
“We are counting on a smooth handover with zero disruption to Malampaya’s vital gas operations that supply up to 20 percent of the country’s electricity demand and provide the government a 60 percent share in net revenues,” Pimentel, House good government and public accountability committee vice chairperson, said in a statement on Sunday.
Pimentel’s remarks came after a second reelectionist senator pressed for an inquiry into Udenna subsidiary Malampaya Energy XP Pte Ltd’s acquisition of Shell’s operating stake in the offshore gas field.
Responding to the call for a probe, Pimentel said: “We’re not surprised at all by the political noise coming from senatorial candidates who might want to stir things up to put themselves in the limelight.”
“The candidates who are ranked No. 7 to No. 15 in the surveys are the ones under pressure to target everything under the sun for them to stand out. Those in the top six in the senatorial surveys are fairly quiet, because they are already assured of winning. They are not going overboard to advertise themselves,” Pimentel said.
Effective Jan. 1, 2022, Udenna will become the Malampaya operator, following Shell’s decision to sell for $460 million its 100 percent stake in Shell Philippines Exploration B.V. (SPEX).
SPEX holds a 45 percent operating interest in Malampaya under Service Contract 38.
Pimentel welcomed the new operator’s decision to absorb all of SPEX’s officers and staff, thus ensuring the operational reliability and safety of Malampaya’s gas business.
“Moving forward, we in the House are now more interested in the country’s longer-term energy security, particularly the development of the larger Sampaguita gas discovery located 250 kilometers southwest of Malampaya,” Pimentel said.
Citing DOE records, Pimentel said Sampaguita’s operator is required to drill two offshore appraisal wells on or before Oct. 16, 2022, a deadline less than 11 months away.
“We want the operator to drill the commitment wells on schedule. We are hoping that Sampaguita can transition from exploration to production within this decade – just in time to replace Malampaya’s thinning reserves that are projected to last only until 2027 to 2029,” Pimentel said.
Publicly listed PXP Energy Corp., through Forum Energy Ltd, has a 70 percent operating interest in Service Contract 72, which includes the Sampaguita gas finding.
Sampaguita is projected to contain 2.6 trillion cubic feet of in-place gas and 5.5 trillion cubic feet of in-place prospective gas, according to an independent assessment by Weatherford Petroleum Consultants.
Another study estimates Sampaguita’s potential resources at 3.4 trillion cubic feet of gas and 440 million barrels of oil.