Following Shell’s decision to sell its stake in Shell Philippines Exploration B.V. (SPEX), a House Committee on Good Government and Public Accountability vice chairman on Sunday asked the Department of Energy (DOE) to ensure the “seamless transfer” of Malampaya’s day-to-day gas business.

Surigao del Sur Rep. Johnny Pimentel made the pronouncement amid calls for an inquiry into the $460-million operator switch from Shell Petroleum B.V. to Udenna Corp.

Effective January 1, 2022, Udenna will become Malampaya’s operator, following Shell’s decision to sell for $460 million its 100 percent stake in SPEX.

“We are counting on a smooth handover with zero disruption to Malampaya’s vital gas operations that supply up to 20 percent of the country’s electricity demand and provide the government a 60 percent share in net revenues,” Pimentel said.

His remarks also came after a second reelectionist senator pressed for an inquiry into Udenna subsidiary Malampaya Energy XP Pte Ltd’s acquisition of Shell’s operating stake in the offshore gas field.

Pimentel, meanwhile, welcomed the new operator’s decision to absorb all of SPEX’s officers and staff, thus assuring the operational reliability and safety of Malampaya’s gas business.

SPEX holds a 45-percent operating interest in Malampaya under Service Contract 38.

Sampaguita gas

According to Pimentel, the lower chamber is now looking into the Sampaguita gas discovery in Recto Bank.

“Moving forward, we in the House are now more interested in the country’s longer-term energy security, particularly the development of the larger Sampaguita gas discovery located 250 kilometers southwest of Malampaya.”

Citing DOE records, Pimentel said Sampaguita’s operator is required to drill two offshore appraisal wells on or before October 16, 2022, a deadline less than 11 months away.

“We want the operator to drill the commitment wells on schedule. We are hoping that Sampaguita can transition from exploration to production within this decade—just in time to replace Malampaya’s thinning reserves that are projected to last only until 2027 to 2029,” Pimentel said.

Publicly listed PXP Energy Corp., through Forum Energy Ltd, has a 70-percent operating interest in Service Contract 72, which includes the Sampaguita gas finding.

Sampaguita is projected to contain 2.6 trillion cubic feet of in-place gas and 5.5 trillion cubic feet of in-place prospective gas, according to an independent assessment by Weatherford Petroleum Consultants.

Another study estimates Sampaguita’s potential resources at 3.4 trillion cubic feet of gas and 440 million barrels of oil.

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