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DOE ready with exploration program, welcomes oil and gas explorers


By Mario Casayuran

Department of Energy (DOE) Secretary Alfonso Cusi said Thursday his department has been inviting oil and gas explorers since last November.

Department of Energy (DOE) Secretary Alfonso Cusi (REUTERS/Romeo Ranoco / MANILA BULLETIN)

Department of Energy (DOE) Secretary Alfonso Cusi (REUTERS/Romeo Ranoco / MANILA BULLETIN)

Cusi said these prospective international and local explorers have to apply, specifying the areas they want to explore, and his department gives the permit for oil and gas exploration.

‘’We have rolled out our exploration program since November,’’ he added.

The issue of stable power generation for the country has been triggered by power brownouts in Luzon caused by power shortages as a result of power plant breakdowns.

Senator Sherwin T. Gatchalian, chairman of the Senate energy committee, had told Senate reporters that Shell Petroleum Exploration B. V. wants to explore areas northwest of Palawan so that it could extend the life span of its current Malampaya gas field for six years.

Gas from the current Malampaya gas site is expected to stop flowing in 2014.

Gatchalian said the DOE should spearhead in finding oil and gas in the country.

Asked what ‘’spearhead’’ means, Cusi told the Bulletin that the DOE gives the exploration permit and awards the exploration project.

Malampaya is currently providing gas to four power plants in Luzon that produces 3,200 megawatts (MWs), he said.
Cusi said the 3,200 MWs produced by these four plants represent 15 percent of Luzon’s power requirement.

Shell Philippines Exploration B.V. is seeking a six-year extension of Service Contract 38 or the Malampaya natural gas project to explore other areas in northwest Palawan.

“We heard that Shell is willing to explore more around that area. In fact, there are three or four potential areas around SC 38 and that will eventually extend the same quantity,” Gatchalian said.

Gatchalian said Spex was seeking to extend its contract to 2030. The Malampaya consortium’s SC 38 contract will expire by 2024.

The consortium is composed of Spex as the operator and with a 40-percent stake, Chevron Malampaya Llc with a 40-percent stake and PNOC Exploration Corp. with a 10-percent stake.

Gatchalian said Spex wanted an extension of the contract because it intended to explore other areas near SC 38 that could yield more natural gas and extend the life of the Malampaya well until 2030.

“That is only a briefing to us by Shell but we also want to understand how that will affect the LNG terminal knowing there are now new prospects. Because if I am the LNG terminal, why would I import if there is still [gas] by 2030. My $2 billion [investment] will be sleeping,” he said.

Gatchalian said he would coordinate with the DOE on the strategy for LNG development given the new development.
The Energy Department earlier issued notices to proceed to two groups for the LNG projects. These include Tanglawan Philippine LNG Inc., the $2-billion LNG venture of Phoenix Petroleum Philippines and China National Offshore Oil Corp. and FGen LNG Corp., a wholly-owned subsidiary of First Gen Corp.

Sources said Shell applied for service contracts around SC 38 under the first Philippine Conventional Energy Contracting Program which remained to be approved by the Energy Department.

The Shell Companies in the Philippines announced in December that it would push for more oil and gas exploration to discover another Malampaya gas field instead of putting up an import terminal for LNG.

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