State-run PNOC Exploration Corp. joined the call of other consortium members to extend the contract covering the $450-million Malampaya gas-to-power project in northwest Palawan which will expire in 2024.
“As the government representative in the SC 38 consortium, PNOC-EC together with our partners are currently working on the approval of our license extension which is expiring in 2024. Based on the study made by the consortium, gas production of the Malampaya deep water gas-to-power project can be sustained beyond 2024,” PNOC-EC president Rozzano Briguez said.
PNOC-EC, the oil and gas unit of Philippine National Oil Co., holds a 10-percent stake in Service Contract 38, or the Malampaya consortium. Other members of the consortium are Shell Philippines Exploration B. V., which is also the operator with a 45-percent stake, and Udenna Corp. with another 45 percent.
The Malampaya platform provides natural gas to five power plants with a combined capacity of more than 3,000 megawatts.
Briguez said the company was also looking at developing other prospects in SC 38 to augment the Malampaya gas production, while the consortium works on obtaining the license extension.
The PNOC EC official said the company would prioritize projects that are doable and that are expected to generate cash flow in the wake of the coronavirus pandemic.
Briguez said PNOC EC would optimize the value of Coal Operating Contract 41 projects that can potentially replace the diminishing revenue from Malampaya.
Briguez said PNOC EC would develop a coal mine in COC 41 Mine 3 area that can potentially generate cashflow despite the current downtrend in energy prices.
“COC 41 projects will generate cashflow despite the current downtrend in energy prices and can sustain the company’s operations with good management,” he said.
The company will also maximize the use of remaining funds to generate cash for operations and continue exploration plans and programs for the other SCs and COCs in its portfolio.
Briguez said PNOC EC would conduct further exploration in SC 57 Calamian as technical data presents the potential of the block. However, PNOC EC needs to find a partner on the project to spread risk and share in cost.
“Based on our data, SC 57 [Calamian] has good potential, but needs to be farmed-out to find a good joint venture partner,” he said.
Briguez said SC 37 in Isabela also remained viable and the drilling of the Chico prospect may be considered once the energy situation improved, particularly the benchmark world crude prices.
The company is also looking at the development of a 50-megawatt coal-fired power plant in COC 122 in Isabela.
“All of these projects will assure sustained cash flow for PNOC EC allowing us to remain among the top performing GOCC’s well into the foreseeable future,” Briguez said.
