By Myrna M. Velasco
An independent third party with deep expertise on the upstream petroleum industry has been recommended to be tapped by the Department of Energy (DOE) to aid it in any decision it will render on the application for license extension of the multi-billion peso deep water gas-to-power Malampaya project.
“It (the DOE) needs a third party,” Rufino B. Bomasang, chairman of the Petroleum Association of the Philippines (PAP) said when asked as to the crucial step that the government must take in assessing prospects of extending Malampaya’s Service Contract (SC) 38 which will expire in 2024.
He further opined “the best scheme is to extend the existing contract – maybe negotiate it – that will be the most seamless transition. They can negotiate on the work program or negotiate the terms.”
That negotiation, according to Bomasang, must be done between the DOE (where the license extension application had been lodged) – with that of the Malampaya consortium which is led by Shell Philippines Exploration B.V. (SPEX) along with Chevron Malampaya LLC and state-owned Philippine National Oil Corporation-Exploration Corporation.
The energy department previously stated that its Energy Resource Development Bureau (ERBD) is reviewing the license extension application and that it is warranted to come up with recommendations to Energy Secretary Alfonso G. Cusi by the end of this year.
Lawyer Kiril Caral, managing counsel of SPEX, said the Malampaya consortium had re-stated its license extension application to the DOE through a letter that was submitted in December last year.
“The request for extension was submitted and it’s something for the government to decide. It’s a matter ultimately for the Department of Energy to discuss and inform the Malampaya consortium on what it intends to do on the extension,” he said.