fcplay ‘P8 billion Malampaya royalties can temper oil price hikes’

Updated:2024-10-28 03:45    Views:185

MANILA, Philippines — The P8-billion windfall the government will receive as royalties this year from the offshore Malampaya natural gas project can be utilized for easing the people’s burden on continuous oil price hikesfcplay, Rep. Johnny Pimentel said yesterday.

Royalties are payments received by the government in return for the Malampaya consortium’s right to harvest the gas field’s reserves, Pimentel noted.

“Malampaya is not just about government royalties. It is about the country’s energy independence and security. We need indigenous gas supplies to reduce import dependence and to insulate the country from harmful global fuel price shocks,” he said.

As per Pimentel’s breakdown, the “sum is P9.7 billion, or 55 percent less than the P17.7 billion in Malampaya royalties the government received in 2023.”

“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,” he said.

Based on Malacañang’s 2025 Budget of Expenditures and Sources of Financing 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.

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 billionfcplay, to drill two new production wells and hook them up to the Malampaya shallow water platform.

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