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PH royalty from Malampaya hits $11.7 B

The royalty share of the Philippine government from the Malampaya project’s operations has so far reached $11.7 billion, significantly higher than the $8 billion estimate when the gas field started commercial operation in 2001.

The Malampaya gas field uses an innovative and sustainable deepwater technology for recovering natural gas from the deepwater reservoir in northwest Palawan. ( note: image from shell.com – google)

Data showed, the latest figure was $700 million higher from the $11 billion in 2019 when the last report was made around August last year.

In 2018, it was reported that remittance to the State had reached $9.709 billion, with the government’s cash yield getting beefed up by $553.54 million in 2017

Through the years, the revenue share of the government from that multi-billion dollar gas field venture had been: $432.75 million in 2016; $445.48 million in 2015; $899.70 million in 2014; $846.50 million in 2013; $1.112 billion in 2012; $1.134 billion in 2011; and $741.10 million in 2010.

In prior years, the Malampaya revenue stream that flowed into the State coffers had been: $675.20 million in 2009; $1.050 billion in 2008; $706.40 million in 2007; $496.90 million in 2006; $197.10 million in 2005; $162 million in 2004; $148.60 million in 2003; $116.10 million in 2002; and $10.30 million in 2001.

Government earnings, however, dipped in years 2013 to 2015 because the Malampaya consortium had the bulk of the cost recoveries on the additional $1.0-billion investment funneled for the installation of the new platform that buoyed the field’s gas production.

Cost recoveries had gone up to $481.30 million in 2013 from a leaner $296.30 million a year before that.

In 2014, cost recovery stood at $400.60 million; and it was at $489.51 million in 2015; then started going down again to $338.72 million in 2016; then to $287 million in 2017.

Industry sources noted though that the government royalty share fetched from the Malampaya project had topped the $8- billion forecasts at the start of the field’s commercial operation in 2001.

The 25-year contract for the Malampaya field will expire in 2024. This means the government still has four more years to corner significant dollar revenue from it.

As could be gleaned from the past years, Malampaya’s scale of remittances to the State coffers had been hovering at $800 million to $1.1 billion annually – just lower on the years when cost recoveries on investments were being made, and on the initial years of gas production.

There have been previous stipulations both from the Department of Energy (DOE) and the Malampaya consortium that the production life cycle of the gas field could still be extended for 5-6 years but that will depend already on the decision of the buyer of the Shell stake in the project. The license extension application of the Malampaya consortium had not been acted upon by the government – and uncertainties are now compounded by changeover in ownerships, especially with the anticipated departure of the current field operator.


Source: Manila Bulletin (https://mb.com.ph/2020/09/28/ph-royalty-from-malampaya-hits-11-7-b/?utm_source=rss&utm_medium=rss&utm_campaign=ph-royalty-from-malampaya-hits-11-7-b)

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