Udenna Group unit Malampaya Energy XP Pte. Ltd. (MEXP) said it is prepared to increase its investments in new exploration and enhancement technologies to boost the gas field’s production and lifespan.
MEXP pointed out that this is on top of its plans to drill more wells within Malampaya’s Service Contract (SC) 38 block off the coast of Palawan. Malampaya, the country’s only major source of indigenous gas, is said to run out of reserves between 2022 and 2027. SC38, meanwhile, expires in 2024.
While MEXP executive Belinda Racela admitted that the Dennis Uy-led firm is in a radically different and challenging operating environment, she also noted that the situation opens up opportunities for growth.
Given that Malampaya is majority-owned by Filipinos, Racela further said that the gas field’s operations won’t have to compete for investment with other assets in a global portfolio. She further vows that MEXP embark on an ambitious growth program upon the handover from Shell Philippines Exploration B.V. (SPEX) to ensure energy security for the country. SPEX, which owns 45% of Malampaya, is currently the gas platform’s operator.
At present, Malampaya is 55% Filipino-controlled. MEXP’s sister firm UC38 LLC holds 45% after buying it from Chevron in March 2020 and upon the Department of Energy’s (DOE) approval last April. PNOC-Exploration Corporation, meanwhile, owns ten percent on behalf of the government. Udenna announced that MEXP bought SPEX in May. The DOE is currently reviewing the Shell-Udenna transaction, which is also under the Senate’s intense scrutiny.
Racela, a veteran of Chevron Malampaya prior to the Udenna purchase, emphasized that there are a range of innovative new production enhancement tools and techniques that have emerged recently and have never been applied in the gas field. These, she said, would provide a potential to revitalize Malampaya if acted upon quickly and decisively.
She pointed out that MEXP would focus on proven rejuvenation strategies that have successfully increased production and extended the production life of other mature fields in the region and globally.