President Ferdinand Marcos Jr. has renewed the 25-year production contract for the Malampaya Service Contract No. 38 (SC 38), which was set to expire in 2024, for a final 15 years, allowing for exploration and utilization of the remaining gas reserves in the field until 2039.
The SC 38 Consortium, which operates the Malampaya gas field, is required to conduct a minimum work program consisting of geological and geophysical studies and the drilling of at least two deep water wells during the Sub-Phase 1 from 2024 to 2029, the Department of Energy (DOE) said in a statement Monday.
The program is aimed at unlocking the potential both in the existing gas field and nearby prospect areas to provide incremental production. Failure to comply with the exploratory drilling requirement may result in the relinquishment of a portion of the exploration areas.
The signing of the renewal agreement is expected to boost the country’s quest for energy security, as the discovery of additional reserves in the Malampaya gas field will add to the Philippines’ energy portfolio. The renewal is also expected to encourage opportunities for further exploration in the country, which remains underexplored.
The SC 38 Consortium is also required to submit a Decommissioning Plan and Budget covering the abandonment of wells and decommissioning of facilities in accordance with applicable international standards, within thirty (30) calendar days from the effectivity of the Renewal Agreement, for approval by the Department of Energy.
The renewal of the Malampaya Service Contract is a significant development for the Philippines, as it ensures the continued production of the country’s largest natural gas field, and provides a boost to the country’s energy security.