DOE tapping foreign consultant to study Malampaya license extension

The Department of Energy (DOE) is tapping a foreign consultant that will undertake a comprehensive study that could aid government on whether or not it shall decide to extend the service contract (SC) of the operating-consortium of the multi-billion Malampaya gas field.

Energy Undersecretary Donato D. Marcos hinted that they are in discussion with two firms now that could be engaged for the consultancy work – these are IHS- Markit and Wood Mackenzie.

Both firms are known to have toptier expertise in the gas industry; and their knowledge scopes are of global dimensions.

“We are talking to Wood Mackenzie and IHS Markit for an independent study because we cannot just be dependent on the study being presented to us by Shell,” Marcos said.

The reference to Shell Philippines Exploration B.V. (SPEX) is anchored on its role as the lead in the Malampaya consortium and it is also the one operating the gas field.

Marcos noted that the government cannot just depend also on the study of Philippine National Oil Company-Exploration Corporation (PNOC-EC), because it may also have its own leaning being the minority stakeholder in the Malampaya consortium.

On funding the proposed study, Marcos indicated that what’s being propounded is to tap on the development assistance fund and utilize it for the engagement of the targeted consultant.

Energy Secretary Alfonso G. Cusi asserted that the case studies will be beneficial in underpinning the State’s decision on whether or not it will target to extend Malampaya’s life with the same contractholders.

Cusi emphasized though that the study outcome must also weigh the implications of non-renewal of the Malampaya field’s license; and must further assess repercussions if another party will be awarded the next lease of operatorship of the gas field.

Malampaya’s service contract will expire in 2024; and SPEX previously filed application for license extension, although it has not actually been following that up for now with the DOE.

Instead, the Philippine subsidiary of the multinational oil giant is still giving its attention on the arbitration case and other legal dispute filings made relative to the ‘back taxes’ issue hurled against it by the Commission on Audit. (MMV)