No China meddling seen over Malampaya

Confident that China will not intervene, the Razon Group’s Prime Energy Resources Development B.V. will proceed to drill two new wells near the Malampaya gas field in the hopes of expanding the area’s viability.

“Prime Energy is optimistic that there will be no intervention or disruption from China when drilling and development activities take place in 2025 and 2026,” the company said in a statement.

It said China has not intervened in any petroleum operations within the Malampaya gas platform since production activities commenced in 2001.

Tensions have risen over the past few months between the Philippines and China over several run-ins in disputed waters in the West Philippine Sea.

Malampaya, which supplies 20 percent of Luzon’s power needs, is located 50 kilometers off Northwest Palawan and sits within the country’s exclusive economic zone.

Amid studies the output will soon be depleted, operators of Service Contract No. 38, which includes Prime Energy, will embark on a drilling and development project called Malampaya Phase 4, which requires an investment of more than $600 million (P33.3 billion).

Gas reservesPrime Energy managing director Donnabel Kuizon Cruz said the company was earmarking about $187 million (P10.4 billion) next year to purchase drilling equipment and other necessary materials.The operators will need at least two deepwater wells in Camago and Malampaya East. Both wells are expected to commence production in 2026.“If the drilling is successful and proves that gas reserves can be produced commercially, the necessary pipelines will be installed and tied into the existing Malampaya production facilities,” Prime Energy said.

It said the government’s support through the Department of Energy would help ensure “the speedy and successful implementation” of Phase 4 “on time and within budget.”