Malampaya natural gas field could yield oil
Apart from the commercial deposit of natural gas at the Malampaya field offshore of Palawan which is now being
developed and harnessed by Shell Philippines Exploration (Spex), it could also yield 50,000 bpd of oil based on
initial tests and estimates. Energy Secretary Mario V. Tiaoqui disclosed that the oil may already flow from the field
in the next six months.
Because of foreseen higher potential, Shell Philippines Exploration (Spex) has decided to sink in additional investment of $ 73 mm for the oil rim extended production test well. Spex is a consortium comprising of Shell Group of Companies, US firm Texaco with 45 % shares each; and government-run Philippine National Oil Company (PNOC) which holds the minority stake of 10 %, and are now jointly developing the Malampaya natural gas field.
PNOC president Rufino B. Bomasang said through the drilling of the extended test wells, Spex could increase the potential production of the field by almost double the estimated current capacity. Tiaoqui said they are eyeing the three local refiners, Petron, Pilipinas Shell Petroleum Company (PSPC) and Caltex Philippines as potential market of the Malampaya's oil output.
The three oil players are affiliated with the companies developing the natural gas field -- Petron with PNOC, Shell with its mother unit; and Caltex with Texaco. Aside from oil, the field would also produce condensate which Spex plans to export to other Asian countries, primarily Singapore, Japan and Hong Kong, upon the resumption of its commercial operation next year.
Spex estimated the Malampaya field could yield around 20,000 to 25,000 bpd of condensate. A by-product of natural
gas, condensate can be used as fuel for combined cycle gas turbine power facilities.
Natural gas from the Malampaya field would start to flow in October 2001, but it would only be able to supply end-users by the first quarter of 2001. While local power plants can use condensate to run their turbines, Spex finds it more advantageous to export the fuel because of the stable demand in the international market.
The Philippine government could earn up to $ 12 bn in revenues over 20 years from the Malampaya gas project. It is to receive 60 % of total revenue from the project, implying Malampaya could generate revenue of around $ 20 bn over 20 years or an average of $ 1 bn per year.