News Release

PBBM commits to ensuring PH energy security, signs Malampaya Service Contract 38

President Ferdinand R. Marcos Jr. said his administration is committed to ensuring energy security in the country, as he signs Monday Service Contract (SC) 38 renewal agreement for the Malampaya Deep Water Gas-to-Power Project.

“As we renew Service Contract (SC) 38, we optimistically look forward to the continued production and utilization of the remaining reserves of the Malampaya gas field, as well as further exploration and development of its untapped potential,” President Marcos said during the signing ceremony in Malacañang Palace on Monday.

“As I sign this SC 38 renewal agreement, we also lay stress on the Administration’s commitment to actively pursue the exploration, development, and utilization of the country’s indigenous energy resources, and to optimize our energy mix,” the President said.

The Malampaya Project will reduce the country’s dependence on oil imports and ensure a more stable supply of cleaner energy from an indigenous source. Marcos expressed confidence in the capability and competence of the SC38 Consortium in handling the Project.

He also called on the Department of Energy (DOE) to oversee the Project’s implementation is strictly monitored and make sure the Consortium’s goals are aligned with the country’s national interests.

Considering the projects as the key to the administration’s drive towards energy security, the chief executive said it is also consistent with the Constitution, and the State policy of hastening discovery and production of the country’s indigenous petroleum.

For his part, DOE Secretary Raphael Lotilla welcomed the renewal of SC 38, saying the department has “meticulously evaluated” the Consortium.

“The assessment encompassed legal, technical, and financial capabilities, and confirmed the Consortium’s capacity to sustain the production operations and meet its obligations under the Renewal Agreement. The DoE recommended the renewal of the service contract, anchored on the commitment of the Consortium to actively explore and evaluate additional gas resources,” Lotilla said.

“Through the stringent due diligence observed, the government aims to uphold responsible and sustainable energy practices while effectively managing the valuable resource that is the Malampaya gas field,” he added.

This policy was first laid down in 1972 through the landmark Presidential Decree No. 87 issued by the President’s father, former president Ferdinand E. Marcos, Sr.

From the discovery of the gas field more than three decades ago, and the Project’s commissioning in 2001, the Malampaya Deep Water Gas-to-Power Project has been a boon to the Philippines providing 20 percent of Luzon’s energy requirement.

Through the Project, the government was able to generate P374 billion in revenues. In 2022 alone, the Project yielded about P26 billion in government revenues.

Because of the contract renewal, President Marcos said the government will continue to generate revenues from the Project through a favorable sharing scheme.

At the same time, the President expressed gratitude to the administration’s partners in the private sector for keeping faith in the government’s resolve.

“Through our strategic partnerships, we will remain on course towards the attainment of our goals of total electrification of our country, and of energy adequacy, reliability, and affordability, all for the betterment of the lives of the ordinary Filipinos,” he said.

The Malampaya Deep Water Gas-to-Power Project utilizes state-of-the-technology to extract natural gas and condensate from the depths of the Palawan basin.

It will then process the gas in the nearby shallow water production platform and transport it across three provinces through a 504-kilometer underwater pipeline.

An onshore gas plant in Batangas receives the gas for further processing before it is sent to five power-plant customers for power generation.

Among the officials present during the event were Speaker Martin Romualdez, Senator Raffy Tulfo, Executive Secretary Lucas Bersamin, Chief Presidential Legal Counsel Juan Ponce Enrile, Presidential Communications Secretary Cheloy Velicaria-Garafil, Defense Officer-in-Charge Undersecretary Carlito Galvez Jr., Prime Infra Chairman Enrique Razon, and Philippine National Oil Company – Exploration Corporation President and CEO Franz Josef George Alvarez. (PND)