REPORTED BY: RHEINHART PAHILA

THE SYMPHONY OF THE UNSUNG

TALES:
THE
CHRONICLES
OF
MALAMPAYA
The Malampaya Deepwater Gas-toPower project is the first undertaking
of its kind in the Philippines employing
state-of-the-art deepwater technology
to draw natural gas from deep
beneath
Philippine
waters.
The
indigenous gas fuels three natural gasfired power stations with a total
generating
capacity
of
2,700
megawatts to provide 40-45% of
Luzon's
power
generation
requirements.

foreign-exchange savings and energy

security from this clean fuel.
Natural gas has the least CO2
emissions among fossil fuels and is
more efficient than other sources of
power like coal and crude oil.

WHAT IS A NATURAL GAS

Dubbed the fuel of the future,
natural gas is composed of gaseous
hydrocarbons
found
deep
underground, or extracted through
driven wells.
It is formed beneath the earths
surface over millions of years by the
decomposition of organic matter, in
much the same way that oil and coal
are formed. Natural gas is 85-90%
methane, with varying amounts of
ethane, propane, butane, and other
hydrocarbon
compounds.
Some
condensate and oil will always be
associated with the gas.
In its natural state, the gas is
colorless, odorless, and lighter than air
Since October 2001, the Philippines
has been importing less fuel for power
generation, providing the country

THE STORY OF POWER

In 1990, upon acquisition of a 50%
participating interest in SC38, SPEX
( Shell Philippines Exploration) joined
the search for natural gas reserves.
Two years later, the Malampaya gas
field was discovered, and was later
found to be connected to the Camago
structure.
SPEX drilled five wells to determine
the amount of gas available in
Malampaya. The findings confirmed
the presence of a formidable power
source 80 kilometers northwest of
Palawan islandabout 2.7 trillion cubic
feet of natural gas reserves and 85
million barrels of condensate, located
some 3,000 meters below sea level. In

1995, after comprehensive studies, it

was
concluded
that
Malampaya
presented
an
extraordinary
opportunity
for
commercial
gas
development in the Philippines.
In 1998, former President Fidel V.
Ramos signed the declaration of
commerciality of the venture. Threeand-a-half years later, in October
2001, the Malampaya Deep Water
Gas-to-Power Project was inaugurated
in a special ceremony at the onshore
gas plant in Batangas.
Since it began operations in 2001, the
Malampaya project has produced
cleaner-burning natural gas for three
power plants in Batangas, which have
a combined generating capacity of
2,700 megawatts.
Two additional production wells were
successfully installed in 2013, marking
the completion of Malampaya Phase 2.
Malampaya Phase 3 involves the
design, fabrication and installation of a
new depletion compression platform,
and towed toward subic.
It is the first oil and gas platform
designed and constructed in the
Philippines
and
its
successful
completion will position the country as
a player in fabrication for the oil and
gas industry
SHADOW OF DOUBT
The Malampaya Fund was created to
finance energy resource exploration,
development
and
exploitation
projects, but it can also be used for
"such other purpose as may be
directed
by
the
president"
as

prescribed under Presidential Decree

no. 910 issued in March 1976.
In October 2009, President Gloria
Macagapal Arroyo issued Executive
Order 848, allowing the government to
tap the fund for rehabilitation efforts
following
a
series
of
powerful
typhoons.
P900 million in royalties from the
Malampaya Fund should have been
distributed to areas hit by typhoon
Pepeng and tropical storm Ondoy.
But an audit on the funds released
through the DAR found the amount
was siphoned to about a dozen bogusNGOs linked to alleged pork barrel
scam mastermind Janet Lim Napoles.
Pork barrel scam witness Marilyn
Suas has said the NGOs were
supposed
to
deliver
agricultural
packages to around 97 towns, but the
funds were instead remitted to
Napoles, allegedly in collusion with
DAR officials through an elaborate
scheme that involved the forging of
official
documents
endorsement
letters and even LGU officials'
signatures.
ANALYSIS
EO 848 can be prone to abuse
because it can release a money from
Malampaya Fund and the likes through
the discretion of the President other
than energy exploration and research
related activities.
Since the royalties can somehow be
manipulated by Shell and partner
corporations, these corporations can

declare an understated statement of

income and profit.
This activity will create a ripple effect
by patronizing and rearing certain
whims
of
certain
political
and
influential figure.
This is yet another loophole
financial
management
governments fund.

in
of

RECOMMENDATION

Special income and funds

such as this should be directed
straight to National Treasury.

The
validity
constitutionality of
should be revisited.

EO

and
848

No money or funds should be

released for any particular
purpose without inclusion in the
General Appropriation Act of
certain year.