Malampaya Energy Group ramps up tech investments

MANILA, Philippines — The Malampaya Energy Group is prepared to ramp up investments in new exploration and production enhancement technologies to boost production and life of the Malampaya deep water gas-to-power project.

Malampaya Energy XP Pte Ltd. said it would evaluate well and production enhancement technologies to improve recovery from the main Malampaya field in the near term.

This is on top of its planned drilling campaign in the Service Contract (SC) 38  to add reserves and extend the life of the asset.

“We are now in a radically different operating environment that is challenging but also opens up opportunities  for  growth,”  Malampaya Energy executive Belinda  Racela said in a statement.

“As a single asset operation with Filipinos at the helm, Malampaya won’t have to compete for investment with other assets in a global portfolio. We can and will embark on an ambitious growth program  from  Day  1  after  handover  to  safeguard  future energy  supply  for  Filipino  people,” she said.

Racela said  there are a range of innovative new production enhancement tools and techniques that have emerged  in  recent  years  that  have  never  been  applied at  Malampaya.

“We now have a window of opportunity to increase production while simultaneously exploring for new resources in the SC 38 license area. There is potential to breathe new life into the Malampaya field if we  act  quickly  and  decisively,” Racela said.

The official said the group would focus on proven rejuvenation strategies that have successfully increased production and extended the life of other mature fields in the region and globally where oil majors  have  divested  operatorship.

“There is a brilliant, highly motivated and experienced team in place at Malampaya that can make this happen when we support them with the right, highly specialized technical experts and contractors,” Racela said.

“This growth program will mean fewer brownouts and a continuation of safe, reliable and sustainable supply  from  Malampaya  for  decades  to  come,” she said.

Malampaya Energy, a subsidiary of Udenna Corp. of businessman Dennis Uy, earlier said the consortium was looking to put up production facility projects in hopes to immediately boost supply from the Malampaya gas field.

It bought the 45-operating percent in SC 38, which covers the producing Malampaya gas field from Shell Philippines Exploration B.V. (SPEX).

However, the transaction is not yet final until government clears it in accordance with Presidential Decree 87 otherwise known as the Oil Exploration and Development Act of 1972.

SC 38 is the country’s most successful Petroleum Service Contracts (PSC) of 23 active projects. As the largest natural gas industrial project in the Philippines, it recovered all costs in four years.

Operating since 2001, the Malampaya project is the only local producer of indigenous natural gas. It supplies fuel to around 40 percent of gas-fired plants in Luzon, powering around 3,457 megawatts (MW) of power plants that provide power supply to the Luzon grid.

While the contract will end in 2024, supply from the Malampaya gas field is projected to be depleted by early 2022 or latest by 2027.