THE national government expects to collect approximately P8 billion in royalties this year from the aging offshore Malampaya natural gas project, Surigao del Sur Rep. Johnny Pimentel said on Sunday.
“The sum is P9.7 billion, or 55 percent less than the P17.7 billion in Malampaya royalties that the government received in 2023,” Pimentel, a member of the House committee on public accounts, said in a statement.
“We are counting on government royalties from the 24-year-old gas project to gradually recover and increase – hopefully starting in 2026 or 2027 – after two new deepwater production wells are put in place under Phase 4,” Pimentel added.
Based on Malacañang’s 2025 Budget of Expenditures and Sources of Financing (BESF) submitted to Congress, Pimentel noted that the estimated government royalties from Malampaya have been reduced to P8 billion this year and P5 billion in 2025.
Over the 10-year period from 2014 to 2023 alone, the government received an aggregate of P200 billion in Malampaya royalties, or an average of P20 billion per year.
The royalties are payments received by the government in return for the Malampaya consortium’s right to harvest the gas field’s reserves.
“However, Malampaya is not just about government royalties. It is, more importantly, about the country’s energy independence and security,” Pimentel emphasized.
“We need indigenous gas supplies to reduce import dependence, and to insulate the country from harmful global fuel price shocks,” Pimentel added.
Malampaya’s gas supplies have been used to run major power plants in Luzon over the years.
Pimentel credited Prime Energy Resources Development B.V., the operator of Malampaya, for its bold move to extract fresh gas supplies and prolong the project’s productive life by at least another 15 years through Phase 4.
Under Phase 4, Prime Energy will spend up to $600 million (or P35 billion) to drill two new production wells, and then hook them up to the Malampaya shallow water platform.
Drilling is set for the second quarter of 2025, with the aim to deliver new gas by 2026.
The company has awarded to London-based Noble Corp. a $69.9 million contract to drill the two new production wells, with the option to drill a third exploratory well.
It has also awarded Dutch firm Allseas Nederland (Brasil) B.V. a $180 million contract to install the subsea pipeline and umbilical infrastructure that will attach the new production wells to the Malampaya platform.
Last week, the Department of Energy certified Malampaya Phase 4 as a project of “national significance,” entitling it to accelerated regulatory approvals ahead of the scheduled drilling of the new wells.
Malampaya is located 65 kilometers northwest off the coast of Palawan.
The Malampaya consortium is composed of operator Prime Energy, UC38 LLC of the Udenna Group, and the state-run PNOC Exploration Corp.
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