MALAMPAYA-RECTO BANK COMBINATION EYED

A unit of the MVP Group on Tuesday presented to the government an unsolicited proposal that combines existing facilities at the Malampaya natural gas project and anticipated petroleum infrastructure at the Recto Bank.

The proposal was submitted to the Department of Energy as the Malampaya consortium’s concession—under Service Contract No. 38—approaches expiration in 2024, with indefinite indications on whether it will be renewed.

Also, the proposal was announced as Service Contract No. 72 of PXP Energy Corp., the upstream petroleum platform of the Pangilinan-led group, continues to wallow in limbo as territorial disputes between Manila and Beijing remain unresolved.

SC 72 has been under force majeure status—exploration activities were stopped due to unforeseen circumstances— since Dec. 15, 2014 due to the maritime dispute with China.

Based on interpretation of previous surveys made at Recto Bank, a petroleum field called Sampaguita contains 2.5 trillion cubic feet of recoverable gas.

Such volume is comparable to that of the Malampaya deposit, which has been providing fuel to several power plants with a combine generating capacity of 3,200 megawatts.

Meanwhile, state firm PNOC Exploration Corp.—which holds a 10-percent interest in the Malampaya consortium—has been hinting at not renewing the SC 38 concession, with energy officials suggesting that the gas-to-power project be continued under its leadership instead of current operator Shell Philippines Exploration BV.

Shell and Chevron holds a 45percent stake each in the Malampaya project, but Chevron has reportedly entered into a purchase agreement with Davao-based businessman Dennis Uy.

In an interview, PXP Energy director Marilyn A. Victorio-aquino told the Inquirer that her company has various options to go about its unsolicited proposal.

“One is develop the gas resources in SC 72 and partner with the Malampaya consortium to build an integrated gas hub,” Aquino said. “Another (option) is to be a part of the Malampaya consortium and develop the hub.”

She meant that PXP Energy was interested to acquire Chevron’s stake in Malampaya through the right to match the other SC 38 consortium members.

“Consolidating SC 38, SC 72 will have a strategic advantage for the (Philippines), bolstering energy security for next two years,” she said.